UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of
1934
(Amendment No.
)
Filed by the Registrant
x
Filed by a Party other than the Registrant
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Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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x
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
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SOLTA MEDICAL, INC.
(Exact name of registrant as specified in its charter)
(Name of person(s) filing proxy statement, if other than the registrant)
Payment of Filing Fee (Check the appropriate box):
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Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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(2)
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Aggregate number of securities to which transaction applies:
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(3)
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was
determined):
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(4)
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Proposed maximum aggregate value of transaction:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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NOTICE OF
2009 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 4, 2009
To our stockholders:
You are cordially invited to
attend the 2009 Annual Meeting of Stockholders of Solta Medical, Inc. The meeting will be held at our principal executive offices located at 25881 Industrial Boulevard, Hayward, California 94545 on Thursday, June 4, 2009, for the following
purposes:
1. To elect three Class III directors, to serve a three-year term which will expire at the 2012 Annual Meeting of
Stockholders or until such time as their respective successors have been duly elected and qualified;
2. To ratify the appointment of
Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2009; and
3.
To transact such other business as may properly come before the Annual Meeting, including any motion to adjourn to a later date to permit further solicitation of proxies, if necessary, or before any adjournment thereof.
The foregoing items of business are more fully described in the proxy statement accompanying this notice.
The meeting will begin promptly at 9:00 a.m. local time, and check-in will begin at 8:30 a.m. local time. Only those who are Solta Medical common
stockholders of record at the close of business on April 17, 2009 will be entitled to vote and to receive notice of the Annual Meeting and any postponements or adjournments thereof.
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By order of the board of directors,
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By:
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/s/ Stephen J. Fanning
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Stephen J. Fanning
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Chairman, President and Chief Executive Officer
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Hayward, California
May 4, 2009
YOUR VOTE IS IMPORTANT!
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE VOTE PROMPTLY. YOU MAY VOTE VIA THE INTERNET OR BY TELEPHONE, IN EACH CASE AS INSTRUCTED ON THE ENCLOSED PROXY CARD; OR, YOU MAY COMPLETE, SIGN, DATE, AND
RETURN THE ENCLOSED PROXY CARD IN POSTAGE-PAID ENVELOPE PROVIDED. NO ADDITIONAL POSTAGE IS NECESSARY IF THE PROXY IS MAILED IN THE UNITED STATES. YOU MAY REVOKE YOUR PROXY AT ANY TIME BEFORE IT IS VOTED AT THE MEETING.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY
MATERIALS FOR THE STOCKHOLDER MEETING TO BE HELD ON JUNE 4, 2009.
The Companys Proxy
Statement, form of proxy card and Annual Report on Form 10-K are available at
http://phx.corporate-ir.net/phoenix.zhtml?c=178331&p=proxy
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TABLE OF CONTENTS
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-ii-
PROXY STATEMENT
FOR
2009 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 4, 2009
The board
of directors of Solta Medical, Inc., a Delaware corporation, is soliciting the enclosed proxy from you. The proxy will be used at our 2009 Annual Meeting of Stockholders to be held on Thursday, June 4, 2009, beginning at 9:00 a.m., local time,
at our principal executive offices located at 25881 Industrial Boulevard, Hayward, California 94545, and at any postponements or adjournments thereof. This proxy statement contains important information regarding the meeting. Specifically, it
identifies the matters upon which you are being asked to vote, provides information that you may find useful in determining how to vote and describes the voting procedures.
In this proxy statement: the terms
we
,
our
,
Solta Medical
and our
Company
each refer to Solta Medical, Inc.; the term
proxy materials
means this proxy statement, the enclosed proxy card and our Annual Report, which you should read together with our Form 10-K for the year ended December 31,
2008, filed with the U.S. Securities and Exchange Commission on March 31, 2009; and the term
Annual Meeting
means our 2009 Annual Meeting of Stockholders.
We are sending these proxy materials on or about May 4, 2009, to all stockholders of record at the close of business on April 17, 2009 (the
Record Date
).
QUESTIONS AND ANSWERS REGARDING THIS SOLICITATION
AND VOTING AT THE ANNUAL MEETING
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Why am I receiving these proxy materials?
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You are receiving these proxy materials from us because you were a stockholder of record at the close of business on the Record Date which was April 17, 2009. As a stockholder of record,
you are invited to attend the meeting and are entitled to and requested to vote on the items of business described in this proxy statement.
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What is the purpose of the annual meeting?
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At our meeting, stockholders of record will vote upon the items of business outlined in the notice of meeting (on the cover page of this proxy statement), each of which is described more
fully in this proxy statement. In addition, management will be available to respond to questions from stockholders.
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Who is entitled to attend the meeting?
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You are entitled to attend the meeting
only
if you were a Solta Medical stockholder (or joint holder) of record as of the close of business
on April 17, 2009, or if you hold a valid proxy for the meeting. You should be prepared to present photo identification for admittance.
Please also note that if you are not a stockholder of record but hold shares in
street name
(that is, through a broker or nominee), you will need to provide proof
of beneficial ownership as of the Record Date, such as your most recent brokerage account statement, a copy of the voting instruction card provided by your broker, trustee or nominee, or other similar evidence of ownership.
The meeting will begin promptly at 9:00 a.m., local time. Check-in will begin at 8:30 a.m.,
local time.
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Who is entitled to vote at the meeting?
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Only stockholders who owned our common stock at the close of business on the Record Date are entitled to notice of the Annual Meeting and to vote at the meeting, and at any postponements or
adjournments thereof.
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How many shares must be present to conduct business?
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The presence at the meeting, in person or by proxy, of the holders of a majority of the shares of our common stock at the close of business on the Record Date will constitute a quorum. A
quorum is required to conduct business at the meeting. Both abstentions and broker non-votes are counted for the purpose of determining the presence of a quorum.
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What will be voted on at the meeting?
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The items of business scheduled to be voted on at the meeting are as follows:
1. the election of three
nominees to serve as Class III directors on our board; and
2. the ratification of the appointment of our independent registered public accounting firm for the 2009 fiscal year.
These proposals are described more fully below in this proxy statement. As of the date of this proxy
statement, the only business that our board intends to present or knows of that others will present at the meeting is set forth in this proxy statement. If any other matter or matters are properly brought before the meeting, it is the intention of
the persons who hold proxies to vote the shares they represent in accordance with their best judgment.
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How does the board recommend that
I vote?
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Our board recommends that you vote your shares FOR the director nominees and FOR the ratification of independent registered public accounting firm for the 2009 fiscal
year.
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What shares can I vote at the meeting?
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You may vote all shares owned by you as of the Record Date, including (1) shares held directly in your name as the
stockholder of record
, and (2) shares held for you as the
beneficial
owner
through a broker, trustee or other nominee such as a bank.
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What is the difference between holding shares as a stockholder of record and as a beneficial owner?
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Most of our stockholders hold their shares through a broker or other nominee rather than directly in their own name. As summarized below, there are
some distinctions between shares held of record and those owned beneficially.
Stockholders of Record.
If your shares are registered directly in your name with our transfer agent, American Stock Transfer & Trust Company, you are considered, with respect to those shares, the
stockholder of
record
, and these proxy materials are being sent directly to you by us. As the
stockholder of record
, you have the right to grant your voting proxy directly to Solta Medical or to vote in person at the meeting. We have enclosed a proxy
card for you to use.
Beneficial Owner.
If your shares are held in a brokerage
account or by another nominee, you are considered the
beneficial owner
of shares held in
street name
, and these proxy materials are being forwarded to you together with a voting instruction card. As the beneficial owner, you have the
right to direct your broker, trustee or nominee how to vote and are also invited to attend the meeting. Please note that since a beneficial owner is not the
stockholder of record
, you may not vote these shares in person at the meeting unless
you obtain a legal proxy from the broker, trustee or nominee that holds your shares, giving you the right to vote the shares at the meeting. Your broker, trustee or nominee has enclosed or provided voting instructions for you to use in
directing the broker, trustee or nominee how to vote your shares.
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How can I vote my shares without attending the meeting?
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Whether you hold shares directly as the stockholder of record or beneficially in street name, you may direct how your shares are voted without attending the meeting. Stockholders of record of
our common stock may submit proxies by completing, signing and dating their proxy cards and mailing them in the accompanying pre-addressed envelope. Solta Medical stockholders who hold shares beneficially in street name may vote by mail by
completing, signing and dating the voting instruction cards provided by the broker, trustee or nominee and mailing them in the accompanying pre-addressed envelope. In addition, if you are a stockholder of record, you may grant a proxy to vote your
shares at the annual meeting by telephone, by calling 1 (800) PROXIES (1 (800) 776-9437) and following the simple recorded instructions, twenty-four hours a day, seven days a week, at any time prior to 11:59 p.m. on June 3, 2009, the
day before the annual meeting. Alternatively, as a stockholder of record, you may vote via the Internet at any time prior to 11:59 p.m. on June 3, 2009, the day before the annual meeting, by going to http://www.voteproxy.com to create an
electronic ballot. If you vote by telephone or the Internet, you will be required to provide the control number contained on your proxy card. If your shares are held in street name, your proxy card may contain instructions from your broker, bank or
nominee that allow you to vote your shares using the Internet or by telephone. Please consult with your broker, bank or nominee if you have any questions regarding the electronic voting of shares held in street name. The granting of proxies
electronically is allowed by Section 212(c)(2) of the Delaware General Corporation Law.
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How can I vote my shares in person at the meeting?
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Shares held in your name as the stockholder of record may be voted in person at the meeting. Shares held beneficially in street name may be voted in person only if you obtain a legal proxy
from the broker, trustee or nominee that holds your shares giving you the right to vote the shares.
Even if you plan to attend the meeting, we recommend that you also submit your proxy card or voting instructions as described above so that
your vote will be counted if you later decide not to, or are unable to, attend the meeting.
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Can I change my vote?
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You may change your vote at any time prior to the vote at the meeting. If you are the stockholder of record, you may change your vote by granting
a new proxy bearing a later date (which automatically revokes the earlier proxy), by providing a written notice of revocation to our Secretary prior to your shares being voted, or by attending the meeting and voting in person. Attendance at the
meeting will not cause your previously granted proxy to be revoked unless you specifically so request.
For shares you hold beneficially in street name, you may change your vote by submitting new voting instructions to your broker, trustee or nominee, or, if you have obtained a legal proxy from your broker, trustee or
nominee giving you the right to vote your shares, by attending the meeting and voting in person.
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How are votes counted?
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The vote required to approve each item of business and the method for counting votes is set forth below:
Election of Directors.
The director nominees receiving the highest number of affirmative
FOR votes at the meeting (a plurality of votes cast) will be elected to serve as Class III directors. You may vote either FOR or WITHHOLD your vote for the director nominees. A properly executed proxy marked
WITHHOLD with respect to the election of a director will not be voted with respect to the director, although it will be counted for purposes of determining whether there is a quorum.
Ratification of Independent Registered Public Accounting Firm.
For the ratification of the
appointment of our independent registered public accounting firm, the affirmative FOR vote of a majority of the shares represented in person or by proxy and entitled to vote on the item will be required for approval. You may vote
FOR, AGAINST or
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ABSTAIN for this item of business. If you choose to ABSTAIN, your abstention has the same effect as a vote
AGAINST.
If you provide specific written instructions with regard to
certain items, your shares will be voted as you instruct on such items. If you sign your proxy card or voting instruction card without giving specific instructions, your shares will be voted in accordance with the recommendations of the board
(FOR our nominee to the board and FOR ratification of the independent registered public accounting firm, and in the discretion of the proxy holders on any other matters that properly come before the
meeting).
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What is a broker non-vote?
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Under the rules that govern brokers who have record ownership of shares that are held in street name for their clients, who are the beneficial owners of the shares, brokers have the
discretion to vote such shares on routine matters. The election of directors and the ratification of the appointment of independent registered public accounting firm are considered routine matters. Therefore, if you do not otherwise instruct your
broker, the broker may turn in a proxy card voting your shares FOR our nominees to the board and FOR ratification of the independent registered public accounting firm. A
broker non-vote
occurs when a broker
expressly instructs on a proxy card that it is not voting on a matter, whether routine or non-routine.
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How are broker non-votes counted?
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Broker non-votes will be counted for the purpose of determining the presence or absence of a quorum for the transaction of business, but they will not be counted in tabulating the voting result
for any particular proposal.
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How are abstentions counted?
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If you return a proxy card that indicates an abstention from voting on all matters, the shares represented will be counted for the purpose of determining both the presence of a quorum and the
total number of votes cast with respect to a proposal but they will not be voted on any matter at the meeting. In the absence of controlling precedent to the contrary, we intend to treat abstentions in this manner. Accordingly, abstentions will have
the same effect as a vote AGAINST a proposal.
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What happens if additional matters are presented at the meeting?
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Other than the two proposals described in this proxy statement, we are not aware of any other business to be acted upon at the meeting. If you grant a proxy, the persons named as proxy holders,
Stephen J. Fanning (a Director and our President and Chief Executive Officer) and John F. Glenn (our Chief Financial Officer), will have the discretion to vote your shares on any additional matters properly presented for a vote at the meeting. If,
for any unforeseen reason, the nominee for director is not available as a candidate, the persons named as proxy holders will vote your proxy for such other candidate as may be nominated by our board.
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Who will serve as inspector of election?
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We expect a representative of American Stock Transfer & Trust Company, our transfer agent, to tabulate the votes and act as inspector of election at the meeting.
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What should I do if I receive more than one proxy?
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You may receive more than one set of these proxy solicitation materials, including multiple copies of this proxy statement and multiple proxy cards or voting instruction cards. For example, if
you hold your shares in more than one brokerage account, you may receive a separate voting instruction card for each brokerage account in which you hold shares. In addition, if you are a stockholder of record and your shares are registered in more
than one name, you may receive more than one proxy card. Please complete, sign, date and return each Solta Medical proxy card and voting instruction card that you receive to ensure that all your shares are voted.
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Who is soliciting my vote and who is paying the costs?
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Your vote is being solicited on behalf of the board, and we will pay the costs associated with the solicitation of proxies, including preparation, assembly, printing and mailing of this proxy
statement.
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How can I find out the results of the voting?
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We intend to announce preliminary voting results at the meeting and publish final results in our quarterly report on Form 10-Q for the second quarter of fiscal 2009.
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What is the deadline for proposing action or director candidates?
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As a stockholder, you may be entitled to present proposals for action at a future meeting of stockholders, including director nominations.
Stockholder Proposals:
For a stockholder proposal to be considered for inclusion in the
Solta Medical proxy statement for the annual meeting to be held in 2010, the written proposal must be received by our Corporate Secretary at our principal executive offices no later than January 4, 2010. If the date of next years annual
meeting is moved more than 30 days before or after the anniversary date of this years annual meeting, the deadline for inclusion of proposals in our proxy statement will instead be a reasonable time before we begin to print and mail next
years proxy materials. Stockholder proposals must comply with the requirements of Rule 14a-8 of the Securities Exchange Act of 1934, as amended (the
Exchange Act
), and any other applicable rules established by
the U.S. Securities and Exchange Commission (the
SEC
). Proposals should be addressed to:
Secretary
Solta Medical,
Inc.
25881 Industrial Boulevard
Hayward, California 94545
Nomination of Director Candidates:
If you
wish to propose a director candidate for consideration by our board, your recommendation should include information required by our Bylaws and should be directed to our Corporate Secretary at the address of our principal executive offices set forth
above. In addition, the stockholder must give submit the recommendation within the time period set forth above for Stockholder Proposals.
Copy of Bylaw Provisions:
You may contact the Corporate Secretary at our principal executive offices for a copy of the relevant bylaw provisions regarding the
requirements for making stockholder proposals and nominating director candidates.
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How can I obtain the Proxy Materials on the Internet?
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This Proxy Statement, the form of proxy card and the Annual Report on Form 10-K are available at
http://phx.corporate-ir.net/phoenix.zhtml?c=178331&p=proxy
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STOCK OWNERSHIP
Security Ownership of Certain Beneficial Owners and Management
The following table provides information relating to the beneficial ownership of our common stock as of April 17, 2009, except where otherwise noted,
by:
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each stockholder known by us to own beneficially more than 5% of our common stock;
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each of our executive officers named in the summary compensation table on page 25 (our Chief Executive Officer, our Chief Financial Officer and our three other most
highly compensated executive officers);
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each of our current directors; and
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all of our directors and executive officers as a group.
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The number of shares beneficially owned by each entity, person, director or executive officer is determined in accordance with the rules of the SEC, and the information is not necessarily indicative of beneficial
ownership for any other purpose. Under such rules, beneficial ownership includes any shares over which the individual has the sole voting power, shared voting power, or investment power and includes any shares that the individual has the right to
acquire within 60 days of April 17, 2009 through the exercise of any stock option or other right. The number and percentage of shares beneficially owned is computed on the basis of 47,758,823 shares of our common stock outstanding
as of April 17, 2009. The information in the following table regarding the beneficial owners of more than 5% of our common stock is based upon information supplied by our principal stockholders or Schedules 13D and 13G filed with the SEC.
Shares of our common stock that a person has the right to acquire within 60 days of April 17, 2009 are deemed outstanding for
purposes of computing the percentage ownership of the person holding such rights, but are not deemed outstanding for purposes of computing the percentage ownership of any other person, except with respect to the percentage ownership of all directors
and executive officers as a group. To our knowledge, except as set forth in the footnotes to this table and subject to applicable community property laws, each person or entity named in the table has sole voting and dispositive power with respect to
the shares set forth opposite such persons or entitys name. The address for those persons for whom an address is not otherwise provided is c/o Solta Medical, Inc., 25881 Industrial Boulevard, Hayward, California 94545.
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Beneficial Owner
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Number of
Shares
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Options
Exercisable
Within
60 Days
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Approximate
Percent
Owned
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5% Stockholders
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Individuals and entities affiliated with Three Arch Capital, L.P.
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6,582,733
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(1)
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13.8
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%
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3200 Alpine Road
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Portola Valley, CA 94028
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Individuals and entities affiliated with Meritech Capital Partners
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5,415,504
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(2)
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11.3
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%
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245 Lytton Ave, Suite 350
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Palo Alto, CA 94301
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Individuals and entities affiliated with Delphi Ventures, L.P.
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3,490,091
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(3)
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7.3
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%
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3000 Sand Hill Road
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Menlo Park, 94025
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Named Executive Officers, Directors and Director Nominees
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Stephen J. Fanning
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73,006
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871,338
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1.9
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%
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John F. Glenn
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17,786
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67,020
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*
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Clint Carnell
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46,445
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170,404
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*
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Sherree L. Lucas(4)
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3,918
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164,019
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*
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Gary L. Wilson(5)
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4,094
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130,936
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*
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Len DeBenedictis(6)
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179,864
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*
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Harold L. Covert
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23,680
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*
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Cathy L. McCarthy
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23,680
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*
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Marti Morfitt
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3,400
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23,680
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*
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Mark M. Sieczkarek
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42,599
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*
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Eric B. Stang(7)
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5,122
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6,756
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*
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Edward W. Knowlton, M.D.
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850,000
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69,582
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1.9
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%
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All executive officers, directors and director nominee as a group (17 persons)
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1,331,164
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1,976,025
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6.6
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%
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*
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Indicates ownership of less than 1%.
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(1)
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Consists of 6,285,596 shares held by Three Arch Capital, L.P. (TAC) and 297,137 shares held by TAC Associates, L.P. (TACA). TAC Management, L.L.C.
(TACM), the general partner of TAC and TACA, may be deemed to have sole power to vote and sole power to dispose of shares of the issuer directly owned by TAC and TACA. Barclay Nicholson (Nicholson), Wilfred Jaeger
(Jaeger) and Mark Wan (Wan) are the managing members of TACM and may be deemed to have shared power to vote and shared power to dispose of shares of the issuer directly owned by TAC and TACA.
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(2)
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Consists of 5,240,591 shares held by Meritech Capital Partners II L.P. (MCP II), 134,844 shares held by Meritech Capital Affiliates II L.P. (MC AFF II), and
40,069 shares held by MCP Entrepreneur Partners II L.P. (MEP II). Meritech Capital Associates II L.L.C. (MCA II) is the general partner of MCP II, MC AFF II and MEP II, and may be deemed to have indirect beneficial ownership
of shares of the issuer directly owned by MCP II, MC AFF II and MEP II. Meritech Management Associates II L.L.C. (MMA II) is a managing member of MCA II and may be deemed to have indirect beneficial ownership of shares of the issuer
directly owned by MCP II, MC AFF II and MEP II. Paul Madera (Madera) and Michael Gordon (Gordon) are managing members of MMA II and may be deemed to have indirect beneficial ownership of shares of the issuer directly owned by
MCP II, MC AFF II and MEP II.
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(3)
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Consists of 2,737,315 shares held by Delphi Ventures VII, L.P. (DV VII), 27,370 shares held by Delphi BioInvestments VII, L.P. (DBI VII),
717,624 shares held by Delphi Ventures V, L.P. (DV V), and 7,782 shares held by Delphi BioInvestments V, L.P. (DBI V). Delphi Management Partners VII, L.L.C. (DMP VII) is the general partner of DV VII and DBI VII
and may be deemed to have sole power to vote and sole power to dispose of shares of the issuer directly owned by DV VII and DBI VII. James J. Bochnowski (Bochnowski), David L. Douglass (Douglass), John F. Maroney
(Maroney), Douglas A.
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Roeder (Roeder) and Deepika R. Pakianathan, Ph.D. (Pakianathan) are the managing members of DMP VII and may be deemed to have shared
power to vote and shared power to dispose of the shares of the issuer directly owned by DV VII and DBI VII. Delphi Management Partners V, L.L.C. (DMP V) is the general partner of DV V and DBI V and may be deemed to have sole power to
vote and sole power to dispose of shares of the issuer directly owned by DV V and DBI V. Bochnowski, Douglass, Donald J. Lothrop (Lothrop), and Kevin L. Roberg (Roberg) are the managing members of DMP V and may be deemed to
have shared power to vote and shared power to dispose of the shares of the issuer directly owned by DV V and DBI V.
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(4)
|
In connection with the completion of our acquisition of Reliant Technologies, the last day of employment of Sherree L. Lucas was December 31, 2008.
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(5)
|
In connection with the completion of our acquisition of Reliant Technologies, the last day of employment of Gary L. Wilson was December 31, 2008.
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(6)
|
Includes 117,260 shares held by Len DeBenedictis Charitable Remainder Unitrust U/A 8/3/95 and 50,769 shares held by PTC Custodian FBO Len DeBenedictis.
|
(7)
|
Includes 50 shares held by Stang Family Trust.
|
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange
Act requires our directors, officers and beneficial owners of more than 10% of our common stock to file reports of ownership and reports of changes in ownership with the SEC. Such persons are required by SEC regulations to furnish us with copies of
all Section 16(a) forms they file.
Based solely on our review of the copies of such forms received by us, or written representations
from reporting persons that no Forms 3, 4 or 5 were required of such persons, we believe that during our fiscal year ended December 31, 2008, all reports were timely filed, with the exceptions noted herein.
One late Form 4 was filed by William Brodie on April 18, 2008 to report the surrender of restricted stock units on March 31, 2008 to satisfy
tax withholding requirements.
One late Form 3 was filed by individuals and entities affiliated with Three Arch Capital, L.P. on
January 20, 2009 related to its initial statement of beneficial ownership of the Companys common stock.
One late Form 3 was
filed by individuals and entities affiliated with Meritech Capital Partners on February 12, 2009 related to its initial statement of beneficial ownership of the Companys common stock.
-8-
CORPORATE GOVERNANCE AND BOARD MATTERS
Board of Directors and Committee Composition
Our authorized number of directors is eight. Our board of directors is divided into three classes, each with staggered three-year terms expiring at the annual meeting of stockholders for the year specified below. Our
board has three standing committees: (1) Nominating and Governance, (2) Compensation, and (3) Audit.
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Name
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Age
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Current
Term
Expires
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Nominating and
Governance
Committee
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Compensation
Committee
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Audit
Committee
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Employee Directors:
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Stephen J. Fanning
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57
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2010
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Leonard DeBenedictis
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68
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2011
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Non-Employee Directors:
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Harold L. Covert
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62
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2010
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Member
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Chair
|
Edward W. Knowlton, M.D.
|
|
60
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|
2011
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Marti Morfitt
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51
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2010
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Chair
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Member
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Non-Employee Directors and Nominees:
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Cathy L. McCarthy
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61
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|
2009
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|
|
Member
|
|
Member
|
Mark M. Sieczkarek
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54
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|
2009
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|
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Chair
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|
Member
|
Eric B. Stang
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49
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2009
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Number of Meetings in Fiscal 2008
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|
|
|
|
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3
|
|
9
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|
7
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Director Nominees
Cathy L. McCarthy
.
Ms. McCarthy has been a director since July 2007. Ms. McCarthy is President & Chief
Executive Officer and director of SM&A, a provider of business capture and post-award risk mitigation services. Since 2000, Ms. McCarthy has served in various senior executive positions at SM&A, including Executive Vice President, Chief
Financial Officer, Corporate Secretary and from 2005 to mid-2007, Ms. McCarthy served as its President and Chief Operating Officer. Ms. McCarthy currently serves as a director of the Orange County Advisory Board of City National Bank.
Ms. McCarthy attended Robert Morris College majoring in finance and accounting, the University Of Wisconsin School Of Banking at Madison and the Carnegie Mellon University Executive Finance & Accounting Program.
Mark M. Sieczkarek
.
Mr. Sieczkarek has been a director since July 2006. From April 2003 to the present,
Mr. Sieczkarek has served as the President and Chief Executive Officer and director of Conceptus, a medical device company. From 1995 to January 2003, Mr. Sieczkarek served in various senior executive positions at Bausch & Lomb,
an eye care company, including as President of the Americas, President of Europe, Middle East and Africa, Vice President of Finance and Information Management and Technology of Bausch & Lomb Surgical, Vice President of Corporate Development
of Bausch & Lomb Surgical, and Vice President and Controller of North American Vision Care. Previously, he served as the Vice President and Chief Financial Officer of KOS Pharmaceuticals. Mr. Sieczkarek currently serves as a director
of the Medical Device Manufacturers Association, a national trade association that represents independent manufacturers of medical devices, diagnostic products and healthcare information systems. Mr. Sieczkarek received his B.S. degree from the
State University of New York at Buffalo and his M.B.A. from Canisius College.
Eric B. Stang
.
Mr. Stang
has been a director since December 2008. From January 2009 to present, Mr. Stang has served as Chief Executive Officer of ooma, Inc. a provider of broadband telephony products. From October 2006 to December 2008, Mr. Stang served as
President and Chief Executive Officer and director of Reliant Technologies. Mr. Stang served as Chairman, President and Chief Executive Officer of Lexar Media, a digital media products company, from July 2003 until its acquisition in June 2006
and until September 2006 in a
-9-
transition role. From July 2001 to July 2003, Mr. Stang served as President, Chief Executive Officer and on the board of directors of Lexar
Media. Mr. Stang currently serves as a director of Rambus, a leading provider of chip-to-chip interface products and services. Mr. Stang received his B.A. degree from Stanford University and his M.B.A. from the Harvard Business School.
Directors Whose Terms Extend Beyond the 2009 Annual Meeting
Stephen J. Fanning.
Mr. Fanning has been our President and Chief Executive Officer since January 2005 and Chairman of the board of
directors since July 2006. From August 2001 to January 2005, Mr. Fanning served as the President and Chief Executive Officer of Ocular Sciences, a manufacturer and distributor of disposable contact lenses. Previously, Mr. Fanning served in
various senior executive positions at Johnson & Johnson for over 25 years. Mr. Fanning currently serves as a director of a privately held company that develops medical devices outside of the aesthetics market. Mr. Fanning received
his B.S. degree from Philadelphia University.
Harold L. Covert
.
Mr. Covert has been a director since July 2007.
From October 2007 to present, Mr. Covert has served as Chief Financial Officer of Silicon Image, Inc., a leader in the secure distribution, presentation and storage of high-definition content. From October 2005 to October 2007, Mr. Covert
served as Chief Financial Officer of Openwave Systems, a provider of software solutions for the communications and media industries. From December 2003 to September 2005, Mr. Covert served as Chief Financial Officer of Fortinet, a network
security company. From July 2001 to October 2003, Mr. Covert served as Chief Financial Officer of Extreme Networks, a network infrastructure equipment provider. Mr. Covert currently serves as a director of JDS Uniphase, a networking
equipment manufacturer, and Harmonic, a leading provider of video delivery solutions to cable, satellite, telco, terrestrial and wireless operators around the world. Mr. Covert received his B.S. degree from Lake Erie College and his M.B.A. from
Cleveland State University. Mr. Covert is a Certified Public Accountant.
Leonard C. DeBenedictis
.
Mr. DeBenedictis has been our Chief Technology Officer and a director since December 2008. From January 2005 to December 2008, Mr. DeBenedictis served as Chief Technology Officer and Executive Vice President of Reliant Technologies.
Mr. DeBenedictis also served as President and Chief Executive Officer of Reliant Technologies from November 2005 to October 2006. From January 2003 to January 2005, Mr. DeBenedictis served as President and Chief Technology
Officer of Reliant Technologies. From February 2002 to January 2003, Mr. DeBenedictis served as Vice President, New Product Development of Reliant Technologies. Mr. DeBenedictis holds a B.S. in Physics from the University of
California at Santa Barbara and an M.S. in Physics from California State University at San Diego.
Edward W. Knowlton,
M.D
.
Dr. Knowlton is a nominee for election to our board of directors. Dr. Knowlton is our founder and has been a director since January 1996. From August 2004 to the present, Dr. Knowlton has been retired
from the practice of medicine, and has focused on developing medical technologies and consulting for us. From November 1978 to August 2004, Dr. Knowlton served as the President of Edward W. Knowlton, M.D. Inc., a private practice in
plastic surgery. He founded the Danville Ambulatory Surgery Center, an outpatient center for plastic surgery, in 1983. Dr. Knowlton received his M.D. from Washington University.
Marti Morfitt
.
Ms. Morfitt has been a director since July 2007. From January 2009 to present, Ms. Morfitt has served
as President of River Rock Partners. From March 1998 to March 2007, Ms. Morfitt was the President and a director of CNS, a manufacturer and marketer of consumer healthcare products. From 1998 until June 2001 she served as CNSs President
and Chief Operating Officer, and from June 2001 until March 2007 as its President and Chief Executive Officer. Prior to CNS, Ms. Morfitt spent 16 years with The Pillsbury Company, a consumer food products company. Ms. Morfitt currently
serves as a director of Graco, a manufacturer of fluid handling systems, Life Time Fitness, a national operator of distinctive and large health and fitness centers, and lululemon athletica, a designer and retailer of technical athletic apparel.
Ms. Morfitt received her H.B.A. from the University of Western Ontario and her M.B.A. from York University in Toronto.
-10-
Board and Committee Meetings
In the year ended December 31, 2008, our board of directors held 19 meetings. Our board of directors has an audit committee, a compensation committee
and a nominating and governance committee. Each of our directors attended at least 75% of the aggregate meetings of the board and the committees on which he or she served that were held in 2008. We also encourage, but do not require our directors to
attend the annual meeting.
Audit Committee
. Our audit committee is a standing committee of, and operates under a written charter
adopted by, our board of directors. The committees written charter is available on our website at
http://www.solta.com
. Our audit committee is chaired by Mr. Covert and also includes Ms. McCarthy and Mr. Sieczkarek, each
of whom is independent within the meaning of applicable SEC and Nasdaq rules. Our board of directors has determined that Mr. Covert qualifies as an audit committee financial expert. The committee is authorized to:
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appoint our independent registered public accounting firm;
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review our internal accounting procedures and financial statements; and
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consult with and review the services provided by our independent registered public accounting firm, including the results and scope of their audit.
|
Compensation Committee
. Our compensation committee is a standing committee of, and operates under a written
charter adopted by, our board of directors. The Compensation Committee, together with our board, establishes compensation for our Chief Executive Officer and our other executive officers and administers the 2006 Equity Incentive Plan, as amended,
the 2006 Employee Stock Purchase Plan, and the 1997 Stock Option Plan. The committees written charter is available on our website at
http://www.solta.com
. Our compensation committee is chaired by Mr. Sieczkarek and also includes
Ms. McCarthy and Ms. Morfitt, each of whom is independent within the meaning of applicable SEC and Nasdaq rules. The committee is authorized to:
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discharge the boards responsibilities relating to compensation of our executive officers;
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|
administer our stock option plans, stock purchase plans, restricted stock plans and any other equity incentive plans we adopt; and
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provide disinterested administration of any employee benefit plans in which our executive officers are eligible to participate.
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Our compensation committee may form and delegate authority to subcommittees when appropriate.
In determining the compensation of the executive officers, our compensation committee has engaged Compensia, an outside executive compensation
consultant, to analyze trends in executive compensation and the compensation of our executive officers compared to its industry peer group. In addition, the Compensation Committee considers the recommendations of Mr. Fanning with respect to the
compensation of the executive officers other than himself.
Nominating and Governance Committee
. Our nominating and governance
committee is a standing committee of, and operates under a written charter adopted by, our board of directors. The committees written charter is available on our website at
http://www.solta.com
. Our nominating and governance committee
is chaired by Ms. Morfitt and also includes Mr. Covert. Ms. Morfitt and Mr. Covert are independent within the meaning of applicable SEC and Nasdaq rules.
The committee is authorized to:
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|
|
discuss and recommend to full board of directors for approval by a majority of the independent members of the board of directors all nominees for membership on the
board of directors;
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-11-
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|
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discuss and recommend to full board of directors for approval by a majority of the independent members of the board of directors the appointment of directors to
committees of the board of directors and suggested rotations for chairmen of committees of the board of directors;
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review issues and developments relating to corporate governance; and
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|
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evaluate the effectiveness of the operation of the board of directors and its committees.
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Consideration of Director Nominees
Stockholder Nominations and Recommendations
. As described above in the Question and Answer section of this proxy statement under What is the deadline to propose actions for consideration at next years annual meeting of
stockholders or to nominate individuals to serve as directors?, our Bylaws set forth the procedure for the proper submission of stockholder nominations for membership on our board. In addition, the Nominating and Governance Committee may
consider properly submitted stockholder recommendations (as opposed to formal nominations) of director candidates. A stockholder may recommend a candidate for the board of directors by submitting the following information to our Secretary at 25881
Industrial Boulevard, Hayward, California 94545: the candidates name, home and business contact information, detailed biographical data, relevant qualifications, professional and personal references and information regarding any relationships
between the candidate and Solta Medical within the last three years. In addition, the party making the recommendation must submit evidence of being a Solta Medical stockholder.
Director Qualifications
. Members of the board should have the highest professional and personal ethics and values, and conduct themselves in a
manner consistent with our Code of Business Conduct and Ethics. The Committee has not established specific minimum qualifications for director candidates, however, it believes that the board of directors should be comprised of directors who
(i) are predominantly independent, (ii) are of high integrity, (iii) have qualifications that will increase overall board effectiveness, and (iv) meet other criteria as may be required by applicable rules, such as financial
literacy or financial expertise with respect to audit committee members.
Identifying and Evaluating Director Nominees
. Typically
new candidates for nomination to our board are suggested by existing directors or by our executive officers. Candidates may also come to the attention of our board through professional search firms, stockholders or other persons. The Committee will
carefully review the qualifications of any candidates who have been properly brought to its attention. Such review may, in the Committees discretion, include a review solely of information provided to the Committee or may also include
discussions with persons familiar with the candidate, an interview with the candidate or other actions that the Committee deems proper. The Committee will consider the suitability of each candidate, including the current members of the board, in
light of the current size and composition of the board. In evaluating the qualifications of the candidates, the Committee considers many factors, including, issues of character, judgment, independence, age, expertise, diversity of experience, length
of service, other commitments and the like. The Committee evaluates such factors, among others, and does not assign any particular weighting or priority to any of these factors. Candidates properly recommended by stockholders will be evaluated by
the independent directors using the same criteria as other candidates.
Director Nominees at our 2009 Annual Meeting
. Our Nominating
and Governance Committee recommended Cathy L. McCarthy, Mark M. Sieczkarek and Eric B. Stang for nomination to our board.
Code of Business Conduct and Ethics
We are committed to maintaining the highest standards of
business conduct and ethics. We have adopted a Code of Business Conduct and Ethics (the Code) for our directors, officers (including our principal executive officer and principal financial officer) and employees. The Code reflects our
values and the business practices and principles of behavior that support this commitment. The Code satisfies SEC rules for a code of ethics
-12-
required by Section 406 of the Sarbanes-Oxley Act of 2002, as well as the Nasdaq listing standards requirement for a code of conduct. The
Code is available on our website at
http://www.solta.com
under Investor RelationsCorporate Governance. We will post any amendment to the Code, as well as any waivers that are required to be disclosed by the rules of the SEC
or the Nasdaq, on our website.
Communications with the Board of Directors
Stockholders wishing to communicate with the board or with an individual board member concerning Solta Medical may do so by writing to the board or to the
particular board member, and mailing the correspondence to Attn: Board of Directors, c/o Secretary, Solta Medical, Inc., 25881 Industrial Boulevard, Hayward, California 94545. The envelope should indicate that it contains a stockholder
communication. All such stockholder communications will be forwarded to the director or directors to whom the communications are addressed.
Director Compensation
From January 1, 2008 to December 10, 2008, each of our non-employee directors received a
$20,000 annual retainer, to be paid quarterly for general service as a director and $1,500 per meeting for attendance in person or $500 for participation via telephone.
On December 10, 2008, our board adjusted the amounts payable to non-employee directors for service as a director. Specifically, effective
January 1, 2009 each non-employee director will receive a $25,000 annual retainer, to be paid quarterly for general service as a director.
From January 1, 2008 to December 10, 2008, the chairpersons of our audit committee, compensation committee, and nominating and governance committee received an annual retainer of $15,000, $9,000 and $3,000, respectively, with each
amount to be paid on a quarterly basis, in consideration for their services in these roles. In addition, each chairperson received $500 for attendance at each committee meeting. Further, non-employee director members of our audit committee,
compensation committee, and nominating and governance committee received an annual retainer of $5,000, $4,000 and $2,000, respectively, with each amount to be paid on a quarterly basis. Each non-employee director committee member also received $500
for attendance at each committee meeting.
In addition, the lead independent director, Mr. Sieczkarek, received an annual retainer of
$10,000.
On December 10, 2008, our board adjusted, effective January 1, 2009, the annual retainers payable to the chairs of the
compensation and nominating and governance committees to $10,000 and $4,000, respectively.
Directors may be reimbursed for expenses
incurred in connection with their attendance at board of directors and committee meetings.
In the past, we granted directors options to
purchase our common stock pursuant to the terms of our 1997 Stock Option Plan. We now provide for the automatic grant of non-statutory options to our non-employee directors under our 2006 Equity Incentive Plan, as amended. From January 1, 2008
to December 10, 2008, each non-employee director first appointed to the board of directors received an initial option to purchase 25,000 shares upon such appointment. Effective December 10, 2008, we adjusted the initial option grant amount
to 50,000 shares upon appointment to the board. These options will vest ratably as to 1/36th of the shares subject to the option each month, subject to the directors continued service on each relevant vesting date. In addition, non-employee
directors who had been directors for at least six months received an option to purchase 12,500 shares immediately following the annual meeting of our stockholders. We adjusted the annual option grant amount to 25,000 shares effective
December 10, 2008 to be issued immediately following each annual meeting of our stockholders. These options will vest ratably as to 1/12th of the shares subject to the option each month, subject to the directors continued service on each
relevant vesting date. All options granted under the automatic grant provisions have a term of ten years and an exercise price equal to the fair market value on the date of grant.
-13-
The following table sets forth a summary of the compensation we paid to our non-employee directors in
2008.
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|
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Name
|
|
Fees Earned
or Paid in
Cash
|
|
Option
Awards(1)
|
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All Other
Compensation
|
|
|
Total
|
Harold L. Covert
|
|
$
|
57,000
|
|
$
|
36,137
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|
|
|
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$
|
93,137
|
Edward W. Knowlton, M.D.
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33,500
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61,209
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$
|
75,000
|
(2)
|
|
|
169,709
|
Cathy L. McCarthy
|
|
|
53,000
|
|
|
36,137
|
|
|
|
|
|
|
89,137
|
Marti Morfitt
|
|
|
48,750
|
|
|
36,137
|
|
|
|
|
|
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84,887
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Mark M. Sieczkarek
|
|
|
64,000
|
|
|
76,322
|
|
|
|
|
|
|
140,322
|
Eric B. Stang
|
|
|
|
|
|
255
|
|
|
|
|
|
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255
|
(1)
|
Amounts represent the dollar amount of compensation expense recorded in our income statement for the 2008 fiscal year in accordance with FAS 123R. Amounts include compensation
expense recognized with respect to awards granted in previous fiscal years, as well as those granted, if any, in the 2008 fiscal year. Page 90 of our Form 10-K describes the assumptions made in the valuation of our options under FAS 123R.
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(2)
|
Amount represents consulting fees earned under a consulting agreement with Dr. Knowlton.
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During fiscal 2008, our non-employee directors were issued options to purchase shares of our common stock as set forth in the following table.
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Name
|
|
Grant Date
|
|
Number of
Securities
Underlying
Options
|
|
Exercise or
Base Price of
Option
Awards
|
|
Grant Date
Fair Value of
Option
Awards(1)
|
Harold L. Covert
|
|
6/5/08
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12,500
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|
$
|
3.24
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$
|
17,711
|
Edward W. Knowlton, M.D.
|
|
6/5/08
|
|
12,500
|
|
|
3.24
|
|
|
17,711
|
Cathy L. McCarthy
|
|
6/5/08
|
|
12,500
|
|
|
3.24
|
|
|
17,711
|
Marti Morfitt
|
|
6/5/08
|
|
12,500
|
|
|
3.24
|
|
|
17,711
|
Mark M. Sieczkarek
|
|
6/5/08
|
|
12,500
|
|
|
3.24
|
|
|
17,711
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Eric B. Stang
|
|
12/23/08
|
|
50,000
|
|
|
1.49
|
|
|
35,230
|
(1)
|
Amounts represent the dollar amount of compensation cost recognized over the requisite service period, in accordance with FAS 123R, which include both the amounts recorded as
compensation expense in our income statement for the 2008 fiscal year as well as amounts to be recognized in future requisite service periods.
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Aggregate number of option awards outstanding (both exercisable and unexercisable) for each of our directors at fiscal year-end are set forth in the following table.
|
|
|
Name
|
|
Number of Option
Awards Outstanding
|
Harold L. Covert
|
|
32,500
|
Edward W. Knowlton, M.D.
|
|
72,500
|
Cathy L. McCarthy
|
|
32,500
|
Marti Morfitt
|
|
32,500
|
Mark M. Sieczkarek
|
|
45,298
|
Eric B. Stang
|
|
50,000
|
Director Independence
Our board of directors has determined that directors Harold L. Covert, Edward W. Knowlton, M.D. and Marti Morfitt, and director nominees Cathy L. McCarthy
and Mark M. Sieczkarek are each independent within the meaning of applicable Nasdaq rules. Mr. DeBenedictis, Mr. Fanning and Mr. Stang are not considered to be independent.
-14-
Our compensation committee is currently chaired by Mr. Sieczkarek and also includes Mc. McCarthy and
Ms. Morfitt, each of whom is independent within the meaning of applicable SEC and Nasdaq rules.
Our nominating and governance
committee is currently chaired by Ms. Morfitt and also includes Mr. Covert. Ms. Morfitt and Mr. Covert are independent within the meaning of applicable SEC and Nasdaq rules.
In determining the independence of Edward W. Knowlton, M.D., our board of directors took into consideration our consulting agreement with Edward W.
Knowlton, M.D. to obtain consulting services related to the development of our Thermage system. Pursuant to the consulting agreement, Dr. Knowlton provides approximately six days of consulting services per month at a rate of $6,250 per month
for an indefinite term. The consulting agreement is terminable by either party upon a one-year written notice.
Related-Party
Transactions
We describe below transactions and series of similar transactions that have occurred during our last fiscal year to which
we were a party or a party in which:
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|
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the amounts involved exceeded or will exceed $120,000; and
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|
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|
a director, executive officer, holder of more than 5% of our common stock or any member of their immediate family had or will have a direct or indirect material
interest.
|
Review, Approval or Ratification of Related-Party Transactions
As provided by our audit committee charter, our audit committee must review and approve in advance any related party transaction. All of our directors,
officers and employees are required to report to our audit committee any such related party transaction prior to its completion.
-15-
REPORT OF THE AUDIT COMMITTEE
The material in this section is not deemed filed with the SEC and is not incorporated by reference in any of our filings under the Securities Act of
1933 or the Securities Exchange Act of 1934, whether made before or after the date of this Proxy Statement and irrespective of any general incorporation language in those filings.
The Audit Committee is responsible for providing oversight to Solta Medicals accounting and financial reporting processes and the audit of Solta
Medicals financial statements. The Audit Committee monitors Solta Medicals external audit process, including auditor independence matters, the scope and fees related to audits, and the extent to which the independent registered public
accounting firm may be retained to perform non-audit services. The Audit Committee also reviews the results of the external audit with regard to the adequacy and appropriateness of our financial, accounting and internal controls over financial
reporting. In addition, the Audit Committee generally oversees Solta Medicals internal compliance programs. The function of the Audit Committee is not intended to duplicate or to certify the activities of management and the independent
registered public accounting firm, nor can the Audit Committee certify that the independent registered public accounting firm is independent under applicable rules. The Audit Committee members are not professional accountants or
auditors. Under its Charter, the Audit Committee has authority to retain outside legal, accounting or other advisors as it deems necessary to carry out its duties and to require Solta Medical to pay for such expenditures.
The Audit Committee provides counsel, advice and direction to management and the independent registered public accounting firm on matters for which it is
responsible, based on the information it receives from management and the independent registered public accounting firm and the experience of its members in business, financial and accounting matters.
Solta Medicals management is responsible for the preparation and integrity of its financial statements, accounting and financial reporting
principles, and internal controls and procedures designed to ensure compliance with accounting standards, applicable laws and regulations.
In this context, the Audit Committee hereby reports as follows:
1. Solta Medical management has represented to the Audit Committee
that the 2008 audited financial statements were prepared in accordance with accounting principles generally accepted in the United States of America. The Audit Committee has reviewed and discussed the audited financial statements for 2008 with Solta
Medicals management and the independent registered public accounting firm.
2. The Audit Committee has discussed with the independent
registered public accounting firm the matters required to be discussed under the Statement on Auditing Standards No. 61, as amended, as adopted by the Public Accounting Oversight Board in Rule 3200T.
3. The Audit Committee has received written disclosures and a letter from the independent registered public accounting firm, PricewaterhouseCoopers LLP,
required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered public accounting firms communications with the Audit Committee concerning independence.
4. Based on the review and discussion referred to above, the Audit Committee recommended to the board, and the board has approved, that the audited
financial statements be included in Solta Medicals Annual Report on Form 10-K for the fiscal year ended December 31, 2008.
The
foregoing report is provided by the undersigned members of the Audit Committee.
Hal Covert, Chairman
Cathy McCarthy
Mark M. Sieczkarek
-16-
EXECUTIVE OFFICERS AND EXECUTIVE COMPENSATION
Executive Officers
Our executive officers are
appointed by, and serve at the discretion of, our board of directors. There are no family relationships among our directors and officers. The following table sets forth certain information concerning our executive officers and directors, as of
April 15, 2009:
|
|
|
|
|
Name
|
|
Age
|
|
Position
|
Stephen J. Fanning
|
|
57
|
|
President, Chief Executive Officer and Chairman of the board of directors
|
Leonard DeBenedictis
|
|
68
|
|
Chief Technology Officer and Director
|
John F. Glenn
|
|
47
|
|
Chief Financial Officer
|
Clint Carnell
|
|
39
|
|
Chief Operating Officer
|
William Brodie
|
|
45
|
|
Vice President, Global Sales
|
H. Daniel Ferrari
|
|
50
|
|
Vice President, Business and Financial Planning
|
Douglas W. Heigel
|
|
48
|
|
Vice President, Operations
|
Cherry Hu
|
|
51
|
|
Vice President, Principal Accounting Officer and Corporate Controller
|
Dragan D. Nebrigic
|
|
46
|
|
Vice President, Research & Development
|
Further information with respect to Stephen J. Fanning and Leonard DeBenedictis is provided above
under Directors Whose Terms Extend Beyond the 2009 Annual Meeting.
John F. Glenn.
Mr. Glenn has been our
Chief Financial Officer since January 2008. From October 2004 to September 2007, Mr. Glenn served as Chief Financial Officer, Vice President of Finance, Treasurer and Secretary of Cholestech, a provider of diagnostic tools and information for
the risk assessment and therapeutic monitoring of heart disease and inflammatory disorders. From 1990 to January 2004, Mr. Glenn served as the Chief Financial Officer and Vice President of Finance for Invivo, a medical device company.
Mr. Glenn received his B.S. in Business Administration from the University of Nevada and M.B.A. from Santa Clara University.
Clint Carnell.
Mr. Carnell has been our Chief Operating Officer since January 2008. From September 2005 to January 2008, Mr. Carnell served as our Vice President, U.S. Sales. Prior to joining Solta Medical,
Mr. Carnell served in various sales and management positions with Bausch & Lomb including Vice President of US Surgical Sales from 2002 to 2005. Previously, Mr. Carnell was the founder, Co-Managing Partner and Board Member of
Charleston Renal Care, a provider of dialysis services. He also held positions in other medical device companies including Johnson & Johnson, Chiron and Gambro Healthcare. Mr. Carnell received his B.A. degree from Duke University.
William Brodie.
Mr. Brodie has been our Vice President, Global Sales since January 2009. From January 2008 to January
2009, Mr. Brodie served as our Vice President, US Sales. From February 2006 to January 2008, Mr. Brodie served as our Director of Sales, Eastern U.S. From September 1998 to February 2006, Mr. Brodie served as Vice President of Sales
and Field Operations and held various sales management positions with Benco Dental, a company specializing in dental office equipment sales, office design and supply management. Mr. Brodie received his B.S. degree from Rollins College and M.S.
in Management from Georgia Institute of Technology.
H. Daniel Ferrari.
Mr. Ferrari has been our Vice President,
Business & Financial Planning since January 2008. From November 2004 to January 2008, Mr. Ferrari served as our Senior Director of Finance. From April 2004 to November 2004, Mr. Ferrari was a consultant for the Company. From
September 2001 to March 2004, Mr. Ferrari served as Vice President, Corporate Controller of Critical Path, Inc., a publicly held enterprise software and hosted messaging company. From 1999 to 2001, Mr. Ferrari was a financial consultant
for a number of private companies, advising executive management and venture capital investors regarding business model optimization, mergers and acquisitions, funding strategy, the IPO process and other financial matters.
-17-
Prior to consulting, Mr. Ferrari served as Vice President, Finance of ReSound, Inc. a publicly held hearing device company, and was with the company
from 1994 through 1999. Mr. Ferrari received his B.S. degree in Commerce and M.B.A. from Santa Clara University.
Douglas W. Heigel.
Mr. Heigel has been our Vice President, Operations since July 2003. From May 2002 to July 2003, he served as our Senior Director, Operations. From October 1995 to February 2002,
Mr. Heigel worked for Argonaut Technologies, a biotech company, first as their Director of Manufacturing and then as Vice President, Manufacturing. In 1995 Mr. Heigel was Director of Manufacturing for Biomolecular Technologies, an early
state biotech company. From 1988 to 1995, Mr. Heigel held engineering and operations management positions with Microsensor Technology, a measurement instrumentation company. Mr. Heigel received his B.S. degree from Oregon State University.
Cherry Hu.
Ms. Hu has been our Vice President, Principal Accounting Officer and Corporate Controller since January
2008. From July 2006 to January 2008, Ms. Hu served as our Corporate Controller. From October 2003 to January 2006, she was Corporate Controller at Fortinet, a privately held network security company. Prior to Fortinet, Ms. Hu spent 16
years with 3Com, a global high tech company, in a variety of financial management positions, most recently as Controller of the Connectivity Business Unit. Ms. Hu began her career at Deloitte Haskins and Sells. She received her Bachelor of
Music degree from College of Notre Dame and M.B.A. from California State University, Hayward. Ms. Hu is a Certified Public Accountant in the state of California.
Dragan D. Nebrigic, Ph.D
.
Dr. Nebrigic has been our Vice President, Research & Development since June 2008. From August 2007 to June 2008, Dr. Nebrigic served as our Senior
Director, Advanced Technologies. Prior to joining Solta Medical, Dr. Nebrigic served as Senior Director, Global Advanced Technologies and Intellectual Property with Maxwell Technologies, a leading developer and manufacturer of innovative,
cost-effective energy storage and power delivery solutions, from July 2005 to December 2006. From June 2004 to July 2005, Dr. Nebrigic served as Executive Director, Engineering and Advanced Technologies with the American Technology, a company
specializing in the design, development and commercialization of sound technologies and acoustic products. Dr. Nebrigic received his B.S. degree from the University of Belgrade, Serbia, and Ph.D. from the University of Cincinnati. He also holds
an adjunct Professor position of Electrical Engineering with the University of Cincinnati.
-18-
COMPENSATION DISCUSSION AND ANALYSIS
Overview
This Compensation
Discussion and Analysis provides qualitative information regarding the manner and context in which compensation is awarded to and earned by our named executive officers and provides perspective for the data presented in the tables and narrative that
follow. Our named executive officers for 2008 were the following current and former executive officers:
|
|
|
Name
|
|
Title
|
Current Executives
|
|
|
Stephen J. Fanning
|
|
President and Chief Executive Officer
|
John F. Glenn
|
|
Chief Financial Officer
|
Clint Carnell
|
|
Chief Operating Officer
|
|
|
Former Executives
|
|
|
Sherree L. Lucas*
|
|
Vice President, Marketing
|
Gary L. Wilson*
|
|
Vice President, International Sales
|
*
|
In connection with the completion of our acquisition of Reliant Technologies, the last day of employment of Sherree L. Lucas and Gary L. Wilson was December 31, 2008.
|
Compensation Philosophy and Objectives
The compensation committee of the board of directors (the Committee), together with our board, is responsible for establishing, implementing
and monitoring adherence with our compensation philosophy. The Committee seeks to ensure that the total compensation paid to our executive officers is fair, reasonable and competitive. The types of compensation and benefits provided to the named
executive officers are similar to those provided to our other executive officers.
The primary objectives of our compensation programs are
to:
|
|
|
attract and retain the top echelon of performers;
|
|
|
|
establish a direct link between sustained performance and individual rewards;
|
|
|
|
create long-term stockholder value; and
|
|
|
|
provide an ownership opportunity for all employees.
|
We seek to foster a performance-oriented culture, where individual performance is aligned with organizational objectives. Company performance is the primary measure of success upon which we structure our compensation.
We evaluate and reward our executive officers based on their contribution to the achievement of short and longer term goals. The Committee believes that the most effective executive compensation program is one that is designed to reward achievement
and that aligns executives interests with those of stockholders by rewarding performance, with the ultimate objective of improving stockholder value and building a sustainable company. The Committee evaluates each executives performance
and compensation. The Committee seeks to ensure that we maintain our ability to attract and retain superior employees in key positions and that the compensation provided to key employees remains competitive relative to the compensation paid to
similarly situated executives of a selected group of our peer companies and the broader marketplace from which we recruit and compete for talent. To that end, the Committee believes the compensation provided by us to our executives, including the
named executive officers, should include a mix of salary, cash bonuses and equity awards that reward performance and the creation of longer-term stockholder value, and that provide the appropriate level of incentives to retain each executive. Each
element of compensation and the practices used to evaluate and inform the Committees decisions are discussed in detail below.
-19-
Executive compensation is reviewed annually, and adjustments are made to reflect performance-based
factors, as well as competitive conditions. Additionally, our 2009 compensation program was impacted by the significant adverse global economic conditions that were affecting our business.
How We Implement and Manage our Executive Compensation Programs
Role of Our Compensation Committee
The Committee sets our overall compensation philosophy, which is reviewed and approved by our board. The Committee also reviews and approves our compensation programs, including the specific compensation of our
executive officers other than our Chief Executive Officer. The Committee also reviews and provides recommendations to our board with respect to the compensation of our Chief Executive Officer, and our board approves the Chief Executive
Officers compensation annually. The Committee regularly meets in executive session to discuss compensation matters. The Committee operates under a written charter adopted by our board. A copy of this charter is available on our website at
http://www.solta.com.
The Committee is appointed by our board, and currently is comprised of Cathy L. McCarthy, Marti Morfitt and
Mark Sieczkarek. The primary purpose of the Committee is to:
|
|
|
discharge the boards responsibilities relating to compensation of our executive officers;
|
|
|
|
administer our stock option plans, stock purchase plans, restricted stock plans and any other equity incentive plans we adopt; and
|
|
|
|
provide disinterested administration of any employee benefit plans in which our executive officers are eligible to participate.
|
The Committee assumes primary responsibility for the annual compensation review process.
Role of Compensation Consultant
The Committee, which has the authority to directly engage outside firms or consultants, has retained Compensia, a third-party compensation consulting firm, to support the Committees responsibilities in determining executive
compensation and administering the related programs. The Committee periodically seeks input from Compensia on a range of external market factors. During 2008, Compensia assisted the Committees executive compensation-setting process by:
|
|
|
reviewing those companies that comprise our peer group and advising on whether any changes to this group were advisable;
|
|
|
|
assisting in the design of our compensation programs for executives and board members, including discussing evolving compensation trends;
|
|
|
|
assisting in the design of our equity ownership guidelines; and
|
|
|
|
compiling and providing market data to assist in setting our compensation plan parameters and measures.
|
The Committee has actively worked with Compensia since 2007. In 2008, the Committee reviewed Compensias relationship with the Company and
determined that Compensia was independent from management. In the future, we may decide not to hire a compensation consultant each year, if we believe that the prior report we obtained, along with publicly-available data from our group, is
sufficient to allow us to make informed decisions with regard to executive compensation matters.
-20-
Role of Executive Officers
Our Chief Executive Officer aids the Committee by providing recommendations regarding the compensation of all executive officers other than himself. Our
Chief Executive Officer also advises the Committee regarding the alignment and weighting of our performance measures under our annual cash incentive (bonus) awards with our overall strategy, the impact of the design of our equity incentive awards on
our ability to attract, motivate and retain highly talented executives, and the competitiveness of our compensation program. Prior to the end of the year, our Chief Executive Officer reviews each executive officers performance as well as the
Companys performance against the pre-established financial targets and critical strategic priorities. Our Chief Executive Officer then presents this assessment to the Committee and makes his recommendations with respect to the appropriate base
salary, annual bonus payments and grants of long-term equity incentive awards for all executive officers, other than himself. Any executive officer who participates in the Committees meetings leaves the meetings during discussions and
deliberations of individual compensation actions affecting him or her personally and during the Committees executive sessions.
Each
named executive officer, with the exception of our Chief Executive Officer, participated in an annual performance review with his or her respective manager, to provide input about his or her contributions to the Companys goals and objectives
for the period being assessed. Our Chief Executive Officer participated in a similar annual review with the Committee and our board. The recommendations of our Chief Executive Officer were assessed in the context of each named executive
officers performance, along with competitive positioning information generated by Compensia and provided to management and the Committee with respect to base salary, bonus and equity compensation for each executive.
Positioning of Cash and Equity Compensation
The Committee believes it is important when making its compensation-related decisions to be informed as to current compensation practices of comparable publicly held companies in the medical device and life sciences
industries. To provide independent and expert advice on appropriate compensation, the Committee directed Compensia to perform an analysis of the executive compensation practices of a number of representative and comparable publicly held companies in
the medical device and life sciences industries.
The peer companies included in the analyses used by the Committee to make compensation
decisions in 2008 were:
|
|
|
|
|
|
|
|
Accuray
|
|
Cyberonics
|
|
SonoSite
|
|
|
|
Biolase Technology
|
|
Cynosure
|
|
TomoTherapy
|
|
|
|
Candela
|
|
HealthTronics
|
|
VNUS Medical Technologies
|
|
|
|
Cepheid
|
|
Natus Medical
|
|
Volcano
|
|
|
|
Cutera
|
|
Palomar Medical Technologies
|
|
|
Companies are selected for inclusion in these analyses based on business characteristics similar
to ours, including, but not limited to, similar business model, stage of development, employee headcount, market capitalization, research and development expenditures, cash reserves and revenue. The Committee adjusts the group of peer companies
annually to take into account our progression in our stage of development and changes in the comparative companies. The Committee, with the assistance of Compensia, also uses (1) information regarding companies with $50 million to $200 million
in annual revenues from the Radford Executive Compensation Survey, which is a broader based compensation data source, and (2) information regarding companies with 150 to 500 employees from a proprietary global life sciences executive
compensation survey to further calibrate its analyses. The Committee uses the cash and equity components data from these analyses to help define the competitive total compensation opportunity for each executive officer, but specific pay decisions
for each executive are based on his or her past and anticipated contributions, current compensation package, retention risks and overall corporate performance.
-21-
Assessment of Corporate and Individual Achievement
Corporate Achievement
At the
beginning of each year, management prepares and proposes to the Committee a detailed set of corporate goals covering the expected operating and financial performance of the Company for the year. Our corporate goals are focused towards deliverables
expected to advance near-term stockholder value while also building towards long-term stockholder value. These corporate goals are then reviewed and approved by the Committee. The Committee also assigns a specific weighting to each goal and
establishes formulas for determining the resulting annual bonus payments based on actual achievement against these goals. In 2008 and 2009, these goals related to targets in the categories of revenue, operating income and product pipeline goals,
each of which was weighted one-third of the total target bonus opportunity. In 2008, the goals related to 12-month targets, and in 2009 the goals were divided into six-month and 12-month targets. At the end of 2008, the Committee assessed the level
of overall level of corporate achievement based on the Companys performance relative to these goals, and at the mid-point and end of 2009, the Committee will make a similar assessment regarding the 2009 six-month and 12-months performance
targets.
Individual Achievement
Although the Committee believes that the largest portion of each executive officers total compensation should be based on our executive officers success as a team and thus based on achievement of shared
financial and critical strategic goals, it also believes that there should be some ability to reward individual and departmental contributions. To that end, we consider individual and departmental performance, the impact of that performance on the
achievement of our strategic goals and objectives and on the executive teams performance as significant factors in setting base salary and in granting equity-based compensation. At the beginning of each year, individual goals are established
for each named executive officer, except for our Chief Executive Officer, whose performance is evaluated based solely on the corporate goals established for the year. These individual goals are derived from the corporate goals that relate to the
named executive officers functional area.
Compensation Components
Compensation for our executive officers, including the named executive officers, is broken out into the following components:
Cash Compensation
. Cash compensation consists of base salary and an annual bonus opportunity. Compensia assists us in analyzing the companies in
our peer group to guide our determination of appropriate cash compensation opportunities. Our cash compensation goals for our executive officers are based upon the following principles:
|
|
|
Ensuring that our short-term incentive program is consistent with our compensation philosophy;
|
|
|
|
Payouts should be based primarily on corporate financial performance, rather than individual performance;
|
|
|
|
With improved company performance, pay will increase toward targeted positioning; and
|
|
|
|
Ensuring that individual target incentive opportunities align target total cash compensation levels with desired
positioning.
|
Base Salary and Total Target Cash Compensation
. In 2008, our goal was to set the base salaries of
our executive officers between the 50th to 60th percentile of our peer group and total target cash compensation at or above the 60th percentile of our peer group. As a result, the Committee accepted managements recommended base salary merit
increases for our executive officers, other than our Chief Executive Officer, that averaged 5% per executive. The Committee determined to also increase our Chief Executive Officers base salary by 6%, which increase was subsequently approved by
the board of directors. For 2009, in light of the significant adverse global economic conditions that were affecting our business, the Committee accepted managements recommendation not to award any base salary increases.
-22-
Bonus Program
. In addition to base salary, we have a bonus plan covering all full-time regular
employees, including our executive officers (except for certain of our employees in manufacturing who participate in a monthly bonus plan and our sales representatives who participate in a sales compensation plan) pursuant to which cash bonus
payments and equity awards may be made. As noted above, bonuses are calculated based upon actual achievement of the pre-established corporate financial goals.
For 2008, the Committee approved a bonus plan covering all full-time eligible regular employees, including our executive officers. The target bonus opportunity for our Chief Executive Officer was 80% of his base
salary, and for each other executive officer, 40% of his or her respective base salary. In December 2008, the Committee determined that the specified 2008 goals relating to revenue, operating income and product pipeline targets had not been achieved
and, as a result, no bonus would be earned pursuant to the bonus plan for 2008.
However, in light of the successful completion of our
significant acquisition of Reliant Technologies during 2008, the Committee determined that a special recognition bonus should be paid to our executive officers and certain employees. The Committee noted that this acquisition was not contemplated as
part of the establishment of the 2008 goals, and the Committee believed that the successful completion of the transaction required extraordinary efforts of our executive officers and key employees during 2008. As a result, the Committee awarded our
Chief Executive Officer a cash bonus of $90,000, Mr. Glenn a cash bonus of $26,500 and Mr. Carnell a cash bonus of $30,000. In addition, as a component of this special recognition bonus and as a retention tool, the Committee determined to
award restricted stock units (RSUs) to each of our Chief Executive Officer, Mr. Glenn and Mr. Carnell in the amounts of 60,403, 17,786 and 20,135 RSUs, respectively, which number of units represented grant date fair values
approximately equal to the cash bonuses paid to these executives. These equity awards will vest 100% in January 2010, provided that the executives remain employed by us at such time. The Committee determined the amount of these bonuses and awards
based on an aggregate value equal to approximately 50% of the original 2008 target bonuses for the executive officers.
For 2009, the
Committee approved a bonus plan covering all full-time eligible regular employees, including our executive officers. The target bonus opportunity for our Chief Executive Officer is 80% of his base salary, for our COO and CFO, 50% of their respective
base salaries, and for each other executive officer, 40% of his or her respective base salary. Bonuses are payable based on actual achievement against six-month and 12-month performance targets in the categories of revenue, operating income and
product pipeline goals, each of which is weighted one-third of the total bonus opportunity. The actual bonuses payable for 2009, if any, will vary depending on the extent to which our actual financial performance meets, exceeds, or falls short of
these financial goals as approved by the Committee. If our actual performance exceeds these goals, the actual bonus payable may be up to 193% of the target bonus based on the formulas established by the Committee.
Long-Term Incentive Program
. We believe that long-term performance is achieved through an ownership culture that encourages long-term performance
by our executive officers through the use of stock-based awards. All employees are eligible to participate in our equity programs. Our equity compensation goals for our executive officers are based upon the following principles:
|
|
|
Stockholder and executive interests should be aligned;
|
|
|
|
The program should be structured to provide meaningful retention incentives to participants; and
|
|
|
|
Actual awards should be tailored to reflect individual performance and recruitment/retention goals.
|
Our practice is to make annual equity grants to our executive officers, consistent with the
practices of the companies in our peer group. We generally target our long-term incentive compensation opportunity at or above the median of our peer group. In February 2008, the Committee awarded grants to our executive officers that approximated
the 50
th
percentile of our peer group. We also took into consideration the use of equity awards as a means of rewarding achievement and as a means
of retention, especially for our executive officers who were mostly vested in their prior awards. In December 2008, the Committee awarded restricted stock units to each of
-23-
our Chief Executive Officer, Mr. Glenn and Mr. Carnell, as described above, as retention tools and in special recognition of their efforts in the
completion of our acquisition of Reliant Technologies.
In 2008, we issued stock options to our executive officers, directors and employees
to purchase shares of our common stock at an exercise price equal to the fair market value of such stock on the date of grant. The date of grant for our executive officers is typically the date of a regularly scheduled board meeting, of which we
have four per year. We have no program, plan or practice to select option grant dates (or set board meeting dates) to correspond with the release of material non-public information.
Severance and Change of Control Benefits.
We entered into change of control and severance agreements providing for certain change of control
benefits for our executive officers, the terms of which are described in more detail below in the sections entitled Employment AgreementsChange of Control and Severance Agreements and Potential Payments Upon Termination or
Change in Control.
Other Benefits
. We provide the following benefits to our executive officers generally on the same basis as
the benefits provided to all employees:
|
|
|
Health, vision and dental insurance;
|
|
|
|
Short-and long-term disability;
|
|
|
|
Employee assistance plan; and
|
|
|
|
Flexible spending plan.
|
We believe
that these benefits are consistent with those offered by other companies and specifically with those companies with which we compete for employees.
Securities Authorized for Issuance under Equity Compensation Plans
The following table includes information as of December 31,
2008 for our equity compensation plans.
|
|
|
|
|
|
|
|
|
Plan category
|
|
Number of securities
to be issued upon exercise
of outstanding options,
warrants and
rights (a)
|
|
Weighted-average exercise
price of
outstanding
options, warrants and
rights
|
|
Number of securities
remaining available for
future issuance under
equity compensation
plans
(excluding
securities reflected in
column (a))
|
|
Equity compensation plans approved by security holders
|
|
5,518,229
|
|
$
|
3.64
|
|
2,318,981
|
(1)
|
Equity compensation plans not approved by security holders
|
|
|
|
|
|
|
|
|
(1)
|
Our 2006 Equity Incentive Plan, as amended, provides for annual increases in the number of shares available for issuance thereunder on the first day of each fiscal
year, beginning with our 2008 fiscal year, equal to the least of: (a) 3.5% of the outstanding shares of our common stock on the last day of the immediately preceding fiscal year; (b) 1,800,000 shares, or (c) such other amount as our
board of directors
|
-24-
|
may determine; and our 2006 Employee Stock Purchase Plan provides for annual increases in the number of shares available for issuance under the plan on the
first day of each fiscal year, beginning with our 2008 fiscal year, equal to the least of: (a) 2% of the outstanding shares of our common stock on the first day of the fiscal year; (b) 900,000 shares; or (c) such other amount as our
board of directors may determine.
|
Summary Compensation Table
The following table sets forth summary compensation information for the years ended December 31, 2008, December 31, 2007 and December 31,
2006 for our chief executive officer, chief financial officer and each of our other three most highly compensated executive officers as of the end of the last fiscal year. We refer to these persons as our named executive officers elsewhere in this
prospectus. Except as provided below, none of our named executive officers received any other compensation required to be disclosed by law or in excess of $10,000 annually.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and Principal
Position
|
|
Year
|
|
Salary
|
|
Bonus
|
|
Stock
Awards
|
|
|
Option
Awards(1)
|
|
|
Non-Equity
Incentive Plan
Compensation(2)
|
|
All Other
Compensation
|
|
|
Total
|
Stephen J. Fanning
|
|
2008
|
|
$
|
450,000
|
|
|
|
$
|
90,000
|
(5)
|
|
$
|
754,166
|
|
|
$
|
90,000
|
|
$
|
|
|
|
$
|
1,384,166
|
President and Chief
Executive Officer
|
|
2007
|
|
|
416,325
|
|
|
|
|
146,246
|
(6)
|
|
|
630,809
|
|
|
|
271,001
|
|
|
|
|
|
|
1,464,381
|
|
2006
|
|
|
390,000
|
|
|
|
|
|
|
|
|
815,521
|
(7)
|
|
|
292,500
|
|
|
|
|
|
|
1,498,021
|
|
|
|
|
|
|
|
|
|
John F. Glenn
|
|
2008
|
|
|
262,994
|
|
|
|
|
26,501
|
(5)
|
|
|
77,187
|
|
|
|
26,500
|
|
|
|
|
|
|
393,182
|
Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Clint Carnell
|
|
2008
|
|
|
300,000
|
|
|
|
|
30,000
|
(5)
|
|
|
290,586
|
|
|
|
30,000
|
|
|
89,712
|
(8)
|
|
|
740,299
|
Chief Operating Officer
|
|
2007
|
|
|
260,832
|
|
|
|
|
49,971
|
(6)
|
|
|
238,309
|
|
|
|
89,956
|
|
|
53,203
|
(8)
|
|
|
692,216
|
|
2006
|
|
|
249,600
|
|
|
|
|
|
|
|
|
193,679
|
(9)
|
|
|
99,840
|
|
|
33,958
|
(8)
|
|
|
577,077
|
|
|
|
|
|
|
|
|
|
Sherree L. Lucas(3)
|
|
2008
|
|
|
212,000
|
|
|
|
|
|
|
|
|
236,053
|
|
|
|
|
|
|
127,200
|
(10)
|
|
|
575,253
|
Vice President,
Marketing
|
|
2007
|
|
|
201,581
|
|
|
|
|
38,990
|
(6)
|
|
|
204,386
|
|
|
|
69,284
|
|
|
|
|
|
|
514,241
|
|
2006
|
|
|
195,000
|
|
|
|
|
|
|
|
|
181,099
|
(11)
|
|
|
78,000
|
|
|
|
|
|
|
454,099
|
|
|
|
|
|
|
|
|
|
Gary L. Wilson(4)
|
|
2008
|
|
|
244,000
|
|
|
|
|
|
|
|
|
210,718
|
|
|
|
|
|
|
158,600
|
(10)
|
|
|
613,318
|
Vice President,
International Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Amounts represent the dollar amount of compensation expense recorded in our income statement in accordance with FAS 123R. Amounts include compensation expense recognized with
respect to awards granted in previous fiscal years, as well as those granted, if any, in the current fiscal year. Page 90 of our Form 10-K filed March 31, 2009 describes the assumptions made in the valuation of our options under FAS 123R.
|
(2)
|
Amounts reported on Non-Equity Incentive Plan Compensation represent cash amounts paid under our bonus program, a non equity incentive program for the achievement of
corporate operating performance. In 2006, our Compensation Committee determined to pay 100% of the target achievement of corporate performance under the bonus program in cash. Such cash amounts were paid in 2007. An additional 50% payout for
overachievement under the 2006 bonus program was made in the form of restricted stock units. Such restricted stock units were granted in 2007 and are shown as stock awards in 2007. In 2007, our Compensation Committee determined to pay 85% of the
target achievement of corporate performance under the bonus program in cash. Such cash amounts were paid in 2008. In 2008, our Compensation Committee determined that the specified 2008 goals under our bonus plan had not been achieved and, as a
result, no bonus would be earned pursuant to the bonus plan for 2008. However, in light of the successful completion of our significant acquisition of Reliant Technologies during 2008, the Compensation Committee awarded executive officers and
certain employees a special recognition bonus. Additionally, as a retention tool, the Committee awarded restricted stock units to executive officers. The Committee determined the amount of these bonuses and awards based on an aggregate value equal
to approximately 50% of the original 2008 target bonuses for the executive officers.
|
-25-
(3)
|
In connection with the completion of our acquisition of Reliant Technologies, the last day of employment of Sherree L. Lucas was December 31, 2008.
|
(4)
|
In connection with the completion of our acquisition of Reliant Technologies, the last day of employment of Gary L. Wilson was December 31, 2008.
|
(5)
|
Represent grant of restricted stock units granted and earned in 2008. The restricted stock units vest on January 23, 2010.
|
(6)
|
Represent grant of restricted stock units earned in 2006 and granted in 2007. The restricted stock units vest in four quarterly installments as follows: March 31,
2007, June 30, 2007, September 30, 2007 and December 31, 2007.
|
(7)
|
An option exercisable for 650,000 shares was deemed forfeited in March 2006 in connection with the repricing of such option.
|
(8)
|
Amounts represent commute-related expenses.
|
(9)
|
An option exercisable for 150,000 shares was deemed forfeited in March 2006 in connection with the repricing of such option.
|
(10)
|
Amounts represent retention bonus and severance expenses.
|
(11)
|
Options exercisable for 75,000 and 75,000 shares were deemed forfeited in March 2006 in connection with the repricing of such options.
|
Grants of Plan-Based Awards in 2008
The following table lists grants of plan based awards made to our named executive officers in 2008 and related total fair value compensation for 2008.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Future Payouts Under
Non-Equity Incentive Plan Awards(1)
|
|
All Other Option Awards
|
Name
|
|
Grant Date
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
Number of
Securities
Underlying
Options
|
|
Exercise
Price of
Option
Awards
|
|
Grant Date
Fair Value of
Option
Awards(2)
|
Stephen J. Fanning
|
|
2/11/08
|
|
$
|
|
|
$
|
|
|
$
|
|
|
150,000
|
|
$
|
4.64
|
|
$
|
299,007
|
President and Chief Executive Officer
|
|
12/23/08
|
|
|
|
|
|
|
|
|
|
|
60,403
|
|
|
*
|
|
|
90,000
|
|
3/20/08
|
|
|
|
|
|
360,000
|
|
|
540,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John F. Glenn
|
|
2/11/08
|
|
|
|
|
|
|
|
|
|
|
175,000
|
|
$
|
4.64
|
|
|
348,670
|
Chief Financial Officer
|
|
12/23/08
|
|
|
|
|
|
|
|
|
|
|
17,786
|
|
|
*
|
|
|
26,501
|
|
|
3/20/08
|
|
|
|
|
|
106,000
|
|
|
159,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Clint Carnell
|
|
2/11/08
|
|
|
|
|
|
|
|
|
|
|
100,000
|
|
$
|
4.64
|
|
|
199,240
|
Chief Operating Officer
|
|
12/23/08
|
|
|
|
|
|
|
|
|
|
|
20,135
|
|
|
*
|
|
|
30,001
|
|
|
3/20/08
|
|
|
|
|
|
120,000
|
|
|
180,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sherree L. Lucas(3)
|
|
2/11/08
|
|
|
|
|
|
|
|
|
|
|
40,000
|
|
$
|
4.64
|
|
|
79,966
|
Vice President, Marketing
|
|
3/20/08
|
|
|
|
|
|
84,800
|
|
|
127,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gary L. Wilson(4)
|
|
2/11/08
|
|
|
|
|
|
|
|
|
|
|
50,000
|
|
$
|
4.64
|
|
|
99,872
|
Vice President, International Sales
|
|
3/20/08
|
|
|
|
|
|
97,600
|
|
|
146,400
|
|
|
|
|
|
|
|
|
*
|
Represent grant of restricted stock units. The restricted stock units 100% vest on January 23, 2010. The share price as of December 23, 2008 was $1.49 per share.
|
(1)
|
Represents cash amounts payable under our 2008 bonus program, a non equity incentive program for the achievement of corporate operating performance. The maximum amount specified
represents 150% of the target achievement of corporate operating performance.
|
(2)
|
In the case of options awarded, amounts represent the dollar amount of compensation cost recognized over the requisite service period, in accordance with FAS 123R,
which include both the amounts recorded as compensation expense in our income statement for the 2008 fiscal year as well as amounts to be recognized
|
-26-
|
in future requisite service periods. Page 90 of our Form 10-K describes the assumptions made in the valuation of our options under FAS 123R.
|
(3)
|
In connection with the completion of our acquisition of Reliant Technologies, the last day of employment of Sherree L. Lucas was December 31, 2008.
|
(4)
|
In connection with the completion of our acquisition of Reliant Technologies, the last day of employment of Gary L. Wilson was December 31, 2008.
|
Employment Agreements
All
of our current executive officers have entered into agreements with us which contain restrictions and covenants. These provisions include covenants relating to the protection of our confidential information and the assignment of inventions. None of
our employees are employed for a specified term, and each employees employment with us is subject to termination at any time by either party for any reason, with or without cause.
Change of Control and Severance Agreements
In June 2008, we entered into the change of control and severance agreements with the following executive officers of the Company: Stephen J. Fanning, John F. Glenn, Clint Carnell, William Brodie,
H. Daniel Ferrari, Douglas W. Heigel, Cherry Hu, Sherree L. Lucas, Dragan D. Nebrigic, Sharon Thompson, and Gary L. Wilson. With respect to Messrs. Fanning and Glenn, such change of control and severance agreements replace
and supersede their previous employment agreements described above with respect to the subject matter contained in the change of control and severance agreements.
Agreement with Stephen J. Fanning, Chief Executive Officer:
Pursuant to the terms of the agreement with Mr. Fanning, in the
event that Mr. Fanning is terminated without cause or resigns for good reason either prior to three (3) months before or after twelve (12) months following a change of control of the Company, he will be
entitled to receive the following benefits:
|
|
|
A lump sum payment equal to two hundred percent (200%) of his annual base salary; and
|
|
|
|
Continuation of certain of his employee benefits for a period of up to twenty-four (24) months following termination.
|
In addition, in the event that Mr. Fanning is terminated without cause or resigns for good reason within three
(3) months before or twelve (12) months following a change of control of the Company, he will be entitled to receive the following benefits:
|
|
|
A lump sum payment equal to two hundred percent (200%) of his annual base salary in effect immediately prior to his termination date or (if greater) at the
level in effect immediately prior to the change of control;
|
|
|
|
A lump sum payment equal to two hundred percent (200%) of his annual target bonus for the fiscal year of his termination or (if greater) the annual target
bonus in effect immediately prior to the change of control;
|
|
|
|
Continuation of certain of his employee benefits for a period of up to twenty-four (24) months following termination; and
|
|
|
|
Full vesting acceleration of all equity incentive awards held by Mr. Fanning at the time of termination.
|
Agreements with John F. Glenn, Chief Financial Officer, and Clint Carnell, Chief Operating Officer:
Pursuant to the terms of the agreements with Messrs. Glenn and Carnell, in the event that either of these executive officers is terminated without
cause or resigns for good reason either prior to three (3) months before or after twelve (12) months following a change of control of the Company, he will be entitled to receive the following benefits:
|
|
|
A lump sum payment equal to one hundred percent (100%) of the executives annual base salary; and
|
-27-
|
|
|
Continuation of certain of the executives employee benefits for a period of up to twelve (12) months following termination.
|
In addition, in the event that any of these executive officers is terminated without cause or resigns for good reason within
three (3) months before or twelve (12) months following a change of control of the Company, he will be entitled to receive the following benefits:
|
|
|
A lump sum payment equal to one hundred percent (100%) of the executives annual base salary in effect immediately prior to the executives
termination date or (if greater) at the level in effect immediately prior to the change of control;
|
|
|
|
A lump sum payment equal to one hundred percent (100%) of the executives annual target bonus for the fiscal year of the executives termination or
(if greater) the annual target bonus in effect immediately prior to the change of control;
|
|
|
|
Continuation of certain of the executives employee benefits for a period of up to twelve (12) months following termination; and
|
|
|
|
Full vesting acceleration of all equity incentive awards held by the executive at the time of termination.
|
Agreements with Vice PresidentsSherree L. Lucas and Gary L. Wilson:
Pursuant to the terms of the agreements with these executives, in the event that any of these executive officers is terminated without cause or resigns for good reason either prior to three
(3) months before or after twelve (12) months following a change of control of the Company, he or she will be entitled to receive the following benefits:
|
|
|
A lump sum payment equal to fifty percent (50%) of the executives annual base salary; and
|
|
|
|
Continuation of certain of the executives employee benefits for a period of up to six (6) months following termination.
|
In addition, in the event that any of these executive officers is terminated without cause or resigns for good reason within
three (3) months before or twelve (12) months following a change of control of the Company, he or she will be entitled to receive the following benefits:
|
|
|
A lump sum payment equal to fifty percent (50%) of the executives annual base salary in effect immediately prior to the executives termination date
or (if greater) at the level in effect immediately prior to the change of control;
|
|
|
|
A lump sum payment equal to fifty percent (50%) of the executives annual target bonus for the fiscal year of the executives termination or (if
greater) the annual target bonus in effect immediately prior to the change of control;
|
|
|
|
Continuation of certain of the executives employee benefits for a period of up to six (6) months following termination; and
|
|
|
|
Full vesting acceleration of all equity incentive awards held by the executive at the time of termination.
|
For purposes of these agreements, cause shall mean (i) the executive officers willful failure to substantially perform the
executive officers duties, other than a failure resulting from the executive officers complete or partial incapacity due to physical or mental illness or impairment; (ii) the executive officers willful act which constitutes
gross misconduct and which is injurious to the Company; (iii) the executive officers willful breach of a material provision of the agreement; or (iv) the executive officers knowing, material and willful violation of a federal
or state law or regulation applicable to the business of the Company.
For purposes of these agreements, good reason shall mean
the executive officers termination of employment within ninety (90) days following the expiration of a reasonable cure period following the
-28-
occurrence of one or more of the following, without the executive officers consent: (i) a material reduction in the executive officers
authority, duties, or responsibilities relative to the executive officers duties, position or responsibilities in effect immediately prior to such reduction; provided, however, that a reduction in duties, position or responsibilities solely by
virtue of the Company being acquired and made part of a larger entity shall not constitute good reason; (ii) a material reduction by the Company of the executive officers base salary in effect immediately prior to such
reduction; (iii) a material change in the geographic location at which the executive officer must perform services (in other words, the relocation of the executive officer to a facility that is more than fifty (50) miles from the executive
officers current location).
Letter Agreement and Consulting Agreement with Sherree Lucas, Vice President of Marketing
In connection with the completion of our acquisition of Reliant Technologies, the last day of employment of Sherree L. Lucas, our Vice
President of Marketing, was December 31, 2008. On October 17, 2008, we entered into a letter agreement with Ms. Lucas addressing the terms of her separation from Solta Medical (the Letter Agreement). In addition, in
connection with Ms. Lucas departure, we entered into a consulting agreement (the Consulting Agreement) with Ms. Lucas dated as of October 17, 2008. Pursuant to the terms of the Letter Agreement, Mr. Wilson will
be entitled to receive the following benefits:
|
|
|
Continued receipt of monthly salary of $17,666.67 ($212,000 on an annualized basis) paid in accordance with Solta Medicals normal payroll procedures through
Ms. Lucas last day with Solta Medical, which was December 31, 2008;
|
|
|
|
If the Compensation Committee determines to pay bonuses to Solta Medicals executive team, the same individual bonus amount Ms. Lucas would have otherwise
received had Ms. Lucas remained employed as a Solta Medical executive through the date bonuses are otherwise paid to Solta Medical executives for performance in 2008, payable in a lump sum at the time bonuses, if any, are paid to Solta Medical
executives;
|
|
|
|
If Ms. Lucas remains employed with Solta Medical through December 31, 2008, a transition bonus in the amount of $21,200, less applicable tax withholding;
|
|
|
|
In accordance with a Change of Control and Severance Agreement previously entered into between Solta Medical and Ms. Lucas effective as of June 16, 2008,
a lump sum payment in the amount of $106,000 representing fifty percent (50%) of annual base salary and continuation of certain employee benefits for a period of up to six (6) months following termination;
|
|
|
|
Pursuant to the terms and conditions of the Consulting Agreement, Ms. Lucas will provide consulting services to Solta Medical from January 1, 2009 through
December 31, 2009 at a rate of $500 per month and her outstanding stock options and other equity awards will continue to vest; and
|
|
|
|
Continuation of certain employee benefits for so long as Ms. Lucas remains employed with Solta Medical.
|
Letter Agreement and Consulting Agreement with Gary L. Wilson, Vice President of International Sales
In connection with the completion of our acquisition of Reliant Technologies, the last day of employment of Gary L. Wilson, our Vice President of
International Sales, was December 31, 2008. On October 9, 2008, we entered into a letter agreement with Mr. Wilson addressing the terms of his separation from Solta Medical (the Letter Agreement). In addition, in
connection with Mr. Wilsons departure, we entered into a consulting agreement (the Consulting Agreement) with Mr. Wilson dated as of December 31, 2008. Pursuant to the terms of the Letter Agreement, Mr. Wilson
will be entitled to receive the following benefits:
|
|
|
Continued receipt of monthly salary of $20,333.33 ($240,000 on an annualized basis) paid in accordance with Solta Medicals normal payroll procedures through
Mr. Wilsons last day with Solta Medical, which was December 31, 2008;
|
-29-
|
|
|
If the Compensation Committee determines to pay bonuses to Solta Medicals executive team, the same individual bonus amount Mr. Wilson would have
otherwise received had Mr. Wilson remained employed as a Solta Medical executive through the date bonuses are otherwise paid to Solta Medical executives for performance in 2008, payable in a lump sum at the time bonuses, if any, are paid to
Solta Medical executives;
|
|
|
|
If Mr. Wilson remains employed with Solta Medical through December 31, 2008, a transition bonus in the amount of $36,600, less applicable tax withholding;
|
|
|
|
In accordance with a Change of Control and Severance Agreement previously entered into between Solta Medical and Mr. Wilson effective as of June 16, 2008,
a lump sum payment in the amount of $122,000 representing fifty percent (50%) of annual base salary and continuation of certain employee benefits for a period of up to six (6) months following termination;
|
|
|
|
Pursuant to the terms and conditions of the Consulting Agreement, Mr. Wilson will provide consulting services to Solta Medical from January 1, 2009
through December 31, 2009 at a rate of $500 per month and his outstanding stock options and other equity awards will continue to vest; and
|
|
|
|
Continuation of certain employee benefits for so long as Mr. Wilson remains employed with Solta Medical.
|
We have adopted a formal severance benefit plan for our full-time employees. The exact payment to any eligible employee is dependent on rank. The maximum
possible payment to the highest ranking employees covered by the plan is equal to 12 weeks of severance pay and 3 months of COBRA coverage and outplacement services. Our Chief Executive Officer, and our Chief Financial Officer and our Executive
Officers, whose change of control and severance agreements provide for separate and superior severance benefits, and our employees based outside the United States, are not eligible to participate in the plan. Each of our other full-time employees
who is involuntarily terminated as a result of the following circumstances is eligible to participate in the plan:
|
|
|
a corporate reorganization;
|
|
|
|
a reduction in staff and selection for participation in the plan by our Chief Executive Officer; or
|
|
|
|
a closure or reorganization of a facility or operation.
|
Potential Payments Upon Termination or Change in Control
The following table lists our named
executive officers and the estimated payments and benefits they would have become entitled to had their employment with us terminated without cause or resigns for good reason on December 31, 2008.
|
|
|
|
|
|
|
|
|
|
Name
|
|
Estimated
Total Value of
Cash
Payment
|
|
Estimated
Total Value of
Health Coverage
Continuation
|
|
Value of
Accelerated
Equity(1)
|
Stephen J. Fanning
|
|
$
|
900,000
|
|
$
|
31,248
|
|
$
|
82,752
|
John F. Glenn
|
|
|
265,000
|
|
|
23,544
|
|
|
24,367
|
Clint Carnell
|
|
|
300,000
|
|
|
23,544
|
|
|
27,585
|
Sherree L. Lucas(2)
|
|
|
|
|
|
|
|
|
|
Gary L. Wilson(3)
|
|
|
|
|
|
|
|
|
|
(1)
|
We estimate the value of acceleration of options and shares held by each of our named executive officers based on a share price of $1.37 per share as of December 31, 2008 and
the number of options and shares held by each of our executive officers that were unvested as of December 31, 2008.
|
(2)
|
In connection with the completion of our acquisition of Reliant Technologies, the last day of employment of Sherree L. Lucas was December 31, 2008.
|
(3)
|
In connection with the completion of our acquisition of Reliant Technologies, the last day of employment of Gary L. Wilson was December 31, 2008.
|
-30-
The following table lists the named executive officers and the estimated amounts they would have become
entitled to had their employment with us terminated as a result of the change of control of the Company on December 31, 2008.
|
|
|
|
|
|
|
|
|
|
Name
|
|
Estimated
Total Value of
Cash
Payment
|
|
Estimated
Total Value of
Health
Coverage
Continuation
|
|
Value of
Accelerated
Equity(4)
|
Stephen J. Fanning
|
|
$
|
1,620,000
|
|
$
|
31,248
|
|
$
|
82,752
|
John F. Glenn
|
|
|
371,000
|
|
|
23,544
|
|
|
24,367
|
Clint Carnell
|
|
|
420,000
|
|
|
23,544
|
|
|
27,585
|
Sherree L. Lucas(5)
|
|
|
|
|
|
|
|
|
|
Gary L. Wilson(6)
|
|
|
|
|
|
|
|
|
|
(4)
|
We estimate the value of acceleration of stock options and shares held by each of our named executive officers under RSU awards based on a share price of $1.37 per share as of
December 31, 2008 and the number of options and shares held by each of our executive officers that were unvested as of December 31, 2008.
|
(5)
|
In connection with the completion of our acquisition of Reliant Technologies, the last day of employment of Sherree L. Lucas was December 31, 2008.
|
(6)
|
In connection with the completion of our acquisition of Reliant Technologies, the last day of employment of Gary L. Wilson was December 31, 2008.
|
-31-
Equity Incentive Awards Outstanding as of December 31, 2008
The following table lists the outstanding option awards held by our named executive officers as of December 31, 2008.
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Number of Securities
Underlying
Unexercised
Options
Exercisable
|
|
Number of Securities
Underlying
Unexercised
Options
Unexercisable
|
|
Option
Exercise
Price
|
|
Option
Expiration Date
|
|
Vesting Schedule
|
|
Stephen J. Fanning
|
|
31,250
|
|
118,750
|
|
$
|
4.64
|
|
2/11/2018
|
|
(1
|
)
|
|
|
54,687
|
|
70,313
|
|
$
|
9.05
|
|
3/19/2017
|
|
(1
|
)
|
|
|
72,309
|
|
29,775
|
|
|
1.90
|
|
2/7/2016
|
|
(1
|
)
|
|
|
636,458
|
|
13,542
|
|
|
1.90
|
|
2/2/2015
|
|
(2
|
)
|
|
|
|
|
|
|
John F. Glenn
|
|
|
|
175,000
|
|
|
4.64
|
|
2/11/2018
|
|
(2
|
)
|
|
|
|
|
|
|
Clint Carnell
|
|
22,916
|
|
77,084
|
|
|
4.64
|
|
2/11/2018
|
|
(1
|
)
|
|
|
13,125
|
|
16,875
|
|
|
9.05
|
|
3/19/2017
|
|
(1
|
)
|
|
|
93,010
|
|
28,125
|
|
|
1.90
|
|
10/5/2015
|
|
(2
|
)
|
|
|
|
|
|
|
Sherree L. Lucas(4)
|
|
8,333
|
|
31,667
|
|
|
4.64
|
|
2/11/2018
|
|
(1
|
)
|
|
|
10,062
|
|
12,938
|
|
|
9.05
|
|
3/19/2017
|
|
(1
|
)
|
|
|
56,250
|
|
18,750
|
|
|
1.90
|
|
12/15/2015
|
|
(1
|
)
|
|
|
71,875
|
|
3,125
|
|
|
1.90
|
|
4/13/2015
|
|
(2
|
)
|
|
|
|
|
|
|
Gary L. Wilson(5)
|
|
10,416
|
|
39,584
|
|
|
4.64
|
|
2/11/2018
|
|
(1
|
)
|
|
|
13,125
|
|
16,875
|
|
|
9.05
|
|
3/19/2017
|
|
(1
|
)
|
|
|
56,250
|
|
18,750
|
|
|
1.90
|
|
12/15/2015
|
|
(1
|
)
|
|
|
35,000
|
|
|
|
|
1.10
|
|
11/20/2013
|
|
(3
|
)
|
(1)
|
The shares underlying this option vest 1/48 per month following the vesting commencement date.
|
(2)
|
The shares underlying this option vest 1/4 on the one year anniversary of the vesting commencement date and 1/48 per month thereafter.
|
(3)
|
The shares underlying this option are fully vested.
|
(4)
|
In connection with the completion of our acquisition of Reliant Technologies, the last day of employment of Sherree L. Lucas was December 31, 2008.
|
(5)
|
In connection with the completion of our acquisition of Reliant Technologies, the last day of employment of Gary L. Wilson was December 31, 2008.
|
Aggregated Option Exercises in 2008
The following table lists the options exercised by our named executive officers in 2008.
|
|
|
|
|
Name
|
|
Option Awards
|
|
Number of Shares
Acquired on Exercise
|
|
Value Realized on
Exercise
|
Stephen J. Fanning
|
|
|
|
|
John F. Glenn
|
|
|
|
|
Clint Carnell
|
|
|
|
|
Sherree L. Lucas(1)
|
|
|
|
|
Gary L. Wilson(2)
|
|
|
|
|
(1)
|
In connection with the completion of our acquisition of Reliant Technologies, the last day of employment of Sherree L. Lucas was December 31, 2008.
|
(2)
|
In connection with the completion of our acquisition of Reliant Technologies, the last day of employment of Gary L. Wilson was December 31, 2008.
|
-32-
Nonqualified Deferred Compensation
None of our named executive officers currently participates in a non-qualified defined contribution plan or other deferred compensation plan maintained by
us.
Compensation Committee Interlocks and Insider Participation
Cathy L. McCarthy, Marti Morfitt, and Mark M. Sieczkarek are the current members of the compensation committee. No member of the Compensation Committee is
an executive officer or former officer of ours. No executive officer of ours served on the board of directors of any entity whose executive officers included a director of ours.
-33-
COMPENSATION COMMITTEE REPORT
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis included in this Proxy Statement with management of Solta
Medical, and based upon those discussions, the Committee has recommended to Solta Medicals board of directors that the Compensation Discussion and Analysis be included in this Proxy Statement.
The foregoing report is provided by the undersigned members of the Compensation Committee.
Mark M. Sieczkarek, Chairman
Cathy L. McCarthy
Marti Morfitt
-34-
PROPOSAL ONEELECTION OF DIRECTORS
Classes of the Board of Directors
Our board currently consists of eight directors, divided among the three classes designated as Class I, Class II and Class III of approximately equal size. The members of each class are usually elected to serve three-year
terms with the term of office for each class ending in successive years.
The term of our Class III directors, Cathy L. McCarthy, Mark
M. Sieczkarek and Eric B. Stang, expires at this Annual Meeting.
Cathy L. McCarthy, Mark M. Sieczkarek and Eric B. Stang have been
nominated for election to the board to serve as our Class III directors until the 2012 Annual Meeting or until their successors have been elected and qualified.
Vote Required
The nominees for directors receiving the highest number of
affirmative votes of the shares entitled to vote for him shall be elected as director. Votes withheld from a director are counted for purposes of determining the presence or absence of the quorum, but have no other legal effect.
Board of Directors Recommendation
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE NOMINEES FOR CLASS III DIRECTORS LISTED ABOVE.
-35-
PROPOSAL TWORATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
Our Audit Committee has selected Deloitte & Touche LLP as the independent registered public accounting firm
to perform the audit of our financial statements for the fiscal year ending December 31, 2009. If our stockholders fail to ratify the Audit Committees selection, the Audit Committee will reconsider whether or not to retain Deloitte &
Touche LLP. Even if the selection is ratified, the Audit Committee may, in its discretion, select a different independent registered public accounting firm at any time during the year if it determines such a change would be in the best interests of
our company and our stockholders.
Representatives of Deloitte & Touche LLP are expected to be present at the meeting. They will have
an opportunity to make a statement if they desire to do so and will be available to respond to appropriate questions from our stockholders.
On April 29, 2009, PricewaterhouseCoopers LLP resigned as the independent registered public accounting firm for Solta Medical, Inc. PricewaterhouseCoopers LLPs resignation will become final upon completion by PricewaterhouseCoopers
LLP of its procedures on the Companys interim financial statements as of and for the quarter ended March 31, 2009 and the filing of the related Form 10-Q.
The reports of PricewaterhouseCoopers LLP on Solta Medical, Inc.s consolidated financial statements as of and for the years ended December 31, 2008 and 2007 did not contain an adverse opinion or a
disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope or accounting principle.
During the years ended
December 31, 2008 and 2007, and through April 29, 2009, there were no (a) disagreements with PricewaterhouseCoopers LLP on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure,
which disagreements, if not resolved to PricewaterhouseCoopers LLPs satisfaction, would have caused PricewaterhouseCoopers LLP to make reference to the subject matter thereof in connection with its reports on the financial statements of Solta
Medical, Inc. for such years, or (b) reportable events, as described under Item 304(a)(1)(v) of Regulation S-K.
During the years
ended December 31, 2008 and 2007, and through April 29, 2009, the Company did not consult with Deloitte & Touche LLP regarding any of the matters or events set forth in Item 304(a)(2)(i) or (ii) of Regulation S-K.
Board of Directors Recommendation
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE RATIFICATION OF DELOITTE & TOUCHE LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2009.
Fees Paid to Independent Registered Public Accounting Firm
The following information sets out the fees paid to our independent registered public accounting firm, PricewaterhouseCoopers LLP, during the fiscal years 2008 and 2007.
|
|
|
|
|
|
|
Service Category
|
|
2008
|
|
2007
|
Audit Fees
|
|
$
|
1,234,358
|
|
$
|
986,226
|
Audit-Related Fees
|
|
|
151,640
|
|
|
25,530
|
Tax Fees
|
|
|
25,000
|
|
|
47,938
|
All Other Fees
|
|
|
369,700
|
|
|
1,500
|
|
|
|
|
|
|
|
Total
|
|
$
|
1,780,698
|
|
$
|
1,061,194
|
|
|
|
|
|
|
|
-36-
In the above table, in accordance with the SECs definitions and rules, audit fees are
fees for professional services for the audit of the Companys 2007 and 2008 financial statements, the audit of the Companys 2007 internal control over financial reporting, the review of quarterly financial statements, and for services
that are normally provided by the accountant in connection with other statutory and regulatory filings or engagements. Audit-related fees are fees for assurance and related services that are reasonably related to the performance of the
audit or review of a companys financial statements, such as advisory on Sarbanes-Oxley compliance; tax services fees are fees for tax compliance, tax advice and tax planning; and all other fees are fees for any services
not included in the first three categories.
To help ensure the independence of the independent registered public accounting firm, the
Audit Committee has adopted a policy for the pre-approval of all audit and non-audit services to be performed for us by the independent registered public accounting firm. Pursuant to this policy, all audit and non-audit services to be performed by
the independent registered public accounting firm must be approved in advance by the Audit Committee. The Audit Committee may delegate to one or more of its members the authority to grant the required approvals, provided that any exercise of such
authority is presented to the full Audit Committee at its next regularly scheduled meeting.
All of the services provided by
PricewaterhouseCoopers described in the table above were approved by the Audit Committee.
-37-
OTHER MATTERS
We are not aware of any other business to be presented at the meeting. As of the date of this proxy statement, no stockholder had advised us of the
intent to present any business at the meeting. Accordingly, the only business that our board intends to present at the meeting is as set forth in this proxy statement.
If any other matter or matters are properly brought before the meeting, the proxies will use their discretion to vote on such matters in accordance with their best judgment.
|
|
|
By order of the board of directors,
|
|
|
By:
|
|
/s/ Stephen J. Fanning
|
|
|
Stephen J. Fanning
|
|
|
Chairman, President and Chief Executive Officer and
|
Hayward, California
May 4, 2009
-38-
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
SOLTA MEDICAL, INC.
2009 ANNUAL
MEETING OF STOCKHOLDERS
The undersigned stockholder of Solta Medical, Inc., a Delaware corporation, hereby acknowledges receipt of the
Notice of Annual Meeting of Stockholders and Proxy Statement each dated May 4, 2009 and hereby appoints Stephen J. Fanning and John F. Glenn, each as proxy and attorney-in-fact, with full power of substitution, on behalf and in the name of the
undersigned to represent the undersigned at the 2009 Annual Meeting of Stockholders of Solta Medical, Inc. to be held on June 4, 2009, at 9:00 a.m., local time, at Solta Medicals offices located at 25881 Industrial Boulevard, Hayward,
California 94545, and at any postponement or adjournment thereof, and to vote all shares of common stock which the undersigned would be entitled to vote if then and there personally present, on the matters set forth below:
SEE REVERSE SIDE
FOLD AND DETACH HERE
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS INDICATED, WILL BE VOTED AS FOLLOWS: (1) FOR THE ELECTION OF THE NOMINATED CLASS III
DIRECTORS; (2) FOR THE RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM AND AS THE PROXY HOLDERS DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY COME BEFORE THE MEETING.
|
|
|
|
|
|
|
|
|
1. Election of Directors
|
|
|
|
FOR
|
|
WITHHOLD
|
|
|
|
|
|
|
|
Class III Nominees:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CATHY L. MCCARTHY
|
|
|
|
¨
|
|
¨
|
|
|
MARK M. SIECZKAREK
|
|
|
|
¨
|
|
¨
|
|
|
ERIC B. STANG
|
|
|
|
¨
|
|
¨
|
|
|
|
|
|
|
|
2. Proposal to ratify the appointment of Deloitte & Touche LLP as independent registered public accounting firm of Solta Medical for the fiscal year
ending December 31, 2009.
|
|
|
|
FOR
¨
|
|
AGAINST
¨
|
|
ABSTAIN
¨
|
|
|
|
|
|
|
|
|
PLEASE SIGN, DATE AND PROMPTLY RETURN THIS PROXY IN THE ENCLOSED RETURN ENVELOPE, WHICH IS POSTAGE PREPAID IF
MAILED IN THE UNITED STATES
SIGNATURE(S)
SIGNATURE(S)
Date:
,
2009
NOTE
: This Proxy should be marked, signed by the stockholder(s) exactly as his or her name appears hereon, and returned promptly in the
enclosed envelope. Id the stock you are voting is registered in the name of two or more persons, each should sign. Persons signing in a fiduciary capacity should use their respective titles If shares are held by joint tenants or as community
property, both parties should sign.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY
MATERIALS FOR THE STOCKHOLDER MEETING TO BE HELD ON JUNE 4, 2009.
The Companys Proxy Statement, form of proxy card and Annual Report on Form 10-K are available at
http://phx.corporate-ir.net/phoenix.zhtml?c=178331&p=proxy
.
FOLD AND DETACH HERE
Vote by Internet or Telephone or Mail
24 Hours a Day, 7 Days a Week
Internet and telephone voting is available through 11:59 PM local time
the day prior to annual meeting day.
Your Internet or telephone vote authorizes the named proxies to vote your shares in the same manner
as if you marked, signed and returned your proxy card.
|
|
|
|
|
|
|
|
|
Internet
|
|
|
|
Telephone
|
|
|
|
Mail
|
|
|
|
|
|
http://www.voteproxy.com
Use the internet to vote your proxy.
Have your proxy card in hand when
you access the web site.
|
|
OR
|
|
1 (800) 776-9437
Use any touch-tone telephone to
vote your proxy. Have your
proxy card in hand when you
call.
|
|
OR
|
|
Mark, sign and date your
proxy card and return it in the enclosed
postage-paid envelope.
|
If you vote your proxy by Internet or by telephone, you do NOT need to mail back your proxy
card.
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